stock exchange report inner 2010.cdr2 reports/the... · flash of our functions 74 presidents of the...

EGYPT

NIGERIA

GHANA

TUNIS

JOHANNESBURG

2 0 1 0A N N U A L REPORT & ACCOUNTS

Mission Statement

Our Vision

To promote increased capital formation in Nigeria by providing issuers

and investors with a responsive, fair and efficient stock market

through competent and dedicated professionals,

using the latest technology, thus assuring local and foreign

investors access to the Nigerian stock market with confidence

both in the regulatory framework and in the reliability of trading

and settlement systems.

“To be the leading Stock Exchange in Sub-Saharan Africa for capital formation, driven by transparency, innovation,

efficiency and liquidity.”

T H E N I G E R I A N S TO C K E X C H A N G E A N N U A L R E P O R T & A C C O U N T S 2 0 1 0 02

CONTENTS

Pages

thNotice of the 50 Annual General Meeting 03Council Members and Advisers 04President's Statement 05Highlights of the Year 17Report of the Council 18Report of the Auditors 21Significant Accounting Policies 23Balance Sheet 28Income and Expenditure 29Statement of Cash Flows 30Notes to the Financial Statement 32Value Added Statement 47Five-year Financial Summary 48

Comparative Trading Activities 50Summary of Trading Activities by Category 51All Share Index 55Summary of Trading Activities 56New Issues Approved in 2010 by Instruments 59New Issues Approved in 2010 by Methods 61Growth in the Number of Listed Securities 63Active Dealing Members 64

Council Members 67Officers of the Exchange 70CEO, Divisional Heads, and Heads of Departments 71

Flash of Our Functions 74Presidents of The Exchange 76Notes 78Proxy Form 79


NOTICE OF THE FIFTIETH ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Fiftieth Annual General Meeting of Members of the Nigerian Stock Exchange will be held on the 11th floor, Stock Exchange House, 2/4 Customs Street Lagos, on 29 November 2011 at 11:00 a.m. to transact the following business:

ORDINARY BUSINESS 1. To present the Report of the National Council, the Financial Statements as at December 31, 2010, and

the Report of the Auditors. 2. To elect members of Council. 3. To authorize members of Council to fix the remuneration of Auditors.

NOTE: Proxy: A Member entitled to attend and vote at the Annual General Meeting is entitled to appoint a proxy to attend and vote instead of him/her. No person shall be appointed a proxy who is not already a Member of The Exchange or the accredited representative of a Member and qualified to vote, save that a corporation being a Member of The Exchange may appoint as its proxy one of its Directors or other authorized representative who is not a Member of The Exchange. Executed proxy forms should be deposited at the registered office of The Exchange at least 48 hours prior to the time of the meeting. A proxy form is attached to this notice.

Dated this 8th day of November 2011

By Order of Council

Tinuade T. Awe Acting Secretary to Council Stock Exchange House 2/4 Customs Street Lagos Nigeria

T H E N I G E R I A N S TO C K E X C H A N G E A N N U A L R E P O R T & A C C O U N T S 2 0 1 0 34T H E N I G E R I A N S TO C K E X C H A N G E A N N U A L R E P O R T & A C C O U N T S 2 0 1 0 04

COUNCIL MEMBERS AND ADVISERS

A G. SECRETARY:

REGISTEREDOFFICE:

AUDITORS:

Ms. Tinuade T. Awe

th th8 and 9 FloorsStock Exchange House2/4 Customs Street, Lagos

Akintola Williams Deloitte(Chartered Accountants)

BANKERS: Access Bank PlcBank PHB (n/k/a Enterprise Bank)First Bank of Nigeria PlcG T Bank PlcIntercontinental Bank PlcSterling Bank PlcUnion Bank of Nigeria PlcUnited Bank of Africa PlcWema Bank PlcZenith Bank Plc

1. Mallam Ballama Manu Interim Head of Council2. Mr. Oscar Onyema Chief Executive Officer (wef 04/04/11)3. Alhaji Aliko Dangote 1st Vice President4. Alabo Reginald Abbey Hart, MON 2nd Vice President5. Dr. Erastus Akingbola, CON Chairperson Lagos/Ibadan Branch Council6. Dr. Oba Otudeko, OFR Ex-Officio7. Alhaji Bello Maccido National Member8. Mr. Emmanuel Ikazoboh National Member

(Interim Administrator up to 30/04/11) 9. Mr. Nsa Harrison National Member (wef 01/03/11) 10. Mrs. Yemisi Ayeni National Member11. Mr. Abubakar Mahmoud, SAN National Member12. Mr. Abimbola Ogunbanjo National Member (wef 12/05/11) 13. Mr. Bismarck Rewane National Member14. Mrs. Dorothy Ufot, SAN National Member15. Mr. Hassan Usman National Member16. Katsina State Investment &

Property Dev. Company Limited Institutional Member 17. UNEX Capital Limited Dealing Member (resigned 12/10/11)18. Partnership Investment

Company Limited Dealing Member19. Reward Investment & Services Limited Dealing Member20. WSTC Financial Services Limited Dealing Member21. APT Funds and Securities Limited Dealing Member22. City-Code Trust & Investment Limited Dealing Member (wef 12/05/11) 23. ICON Stockbrokers Limited Dealing Member24. StanbicIBTC Stockbrokers Limited Dealing Member


PRESIDENT'S STATEMENT

It gives me great pleasure to welcome you all to the 50th Annual General Meeting of The Nigerian Stock Exchange and to present to you the Annual Report and Financial Statements for the year ended 31 December 2010.

Economic performance was mixed in 2010. Provisional estimates from the National Bureau of Statistics (NBS) put the overall Gross Domestic Product (GDP) growth for 2010 at 7.85% higher than the growth rate of 6.96% recorded in 2009. The non-oil sector of the economy remained the main driver of growth. The contribution by the oil sector showed improvement due to the implementation of the amnesty and post amnesty programmes of the Federal government that severely reduced attacks on oil installations. Hence, crude oil production, which stood at approximately 1.9 million barrels per day in December 2009, was estimated to be in the region of 2.15 million barrels per day in December 2010. This put the country well above its agreed production target of 1.67 million barrels per day as a member of the Organization of Petroleum Exporting Countries (OPEC).

The Economy

Mallam Ballama ManuInterim Head of Council

Distinguished Ladies and Gentlemen:


PRESIDENT'S STATEMENT

The price of Nigeria's Bonny light grade averaged $80.9 per barrel, compared with the preceding year's average of $62.1 per barrel, an increase of 30.3%. Also, the 2010 average price was 21 per cent higher than the reserve price of $67 per barrel. OPEC's basket of eleven crude streams averaged $77.35pb, 27% higher than the $61.06pb of 2009. Despite the price increases, attributed largely to positive market sentiments, weaker US Dollar; growing demand, especially from India and China; drop in USA crude oil inventories; and instances of geo-political tensions, available statistics reflected that the government's revenue targets were not realized. Hence, to bridge the revenue gap, the Federal Government, aside from local borrowings applied the nation's savings under the Excess Crude Account (ECA). However, the ECA had been severely depleted from the augmentation of monthly statutory allocations and funding of on-going energy and infrastructural development projects. By year end, the balance in the ECA was $300 million.

The manufacturing sector remained a minor catalyst in the growth and development equation. The sector contributed 1.14% to GDP during the first quarter while also growing by 6.42%. The performance of the manufacturing sector was sub-optimal due to the impact of financial crises, multiple taxation and levies, policy somersault, sharp deceleration in lending to the private sector associated with the structural issues in the banking system and increased risk aversion, decaying infrastructure, underdeveloped agricultural system, low power generation and poor distribution network, all of which led to increased manufacturing costs. The government in an effort to improve manufacturing capacity approved the establishment of N200 billion Small and Medium Enterprises Credit Guarantee Scheme (SMECGS) to promote access to credit by manufacturers and SMEs in Nigeria. Data released by the CBN showed that credit to the private sector recorded an 11-month growth rate of 5.3% (month-on-month) compared to 24.3% in 2009. In nominal terms, credit to the private sector was N10.75 trillion in November 2010 from N10.21 trillion at the end of 2009. The half year growth in credit to the private sector was negative at 1.0%. However, the month-on-month growth in credit to the private sector was positive for four consecutive months at 2.03% in November, 1.92% in October, 2.2% in September and 2.04% in August (for the first time since December 2009).

In April 2010, the CBN announced the creation of the N500 billion Power and Aviation Intervention Fund (PAIF), which was later extended to the manufacturing sector, in a bid to jumpstart activities in the comatose real sector of the Nigerian economy by stimulating private sector investment in the sectors. Later, it inaugurated N300 billion of the PAIF with the appointment of the Bank of Industry (BoI) as the managing agent vested with the responsibility of day-to-day administration of the fund. The African Finance Corporation (AFC) is the technical adviser. The CBN sustained its banking sector reform during 2010. Though, set time lines were not realized due largely to the delay in the commencement of operations of the Asset Management Company of Nigeria (AMCON), significant milestones were recorded especially in the areas of releasing the new prudential guidelines, tenure limits for Managing Directors as well as non executive directors of banks, release of the guidelines for the reintroduction of merchant banking, implementation of the Nigerian Uniform Bank Account Number scheme (NUBAN) to mention just a few. By year end, signs of the banking sector's recovery from the crisis were becoming evident as shown in return to profitable growth by the third quarter, albeit at differing levels. The plan is to complete the sector reform in 2011, which would culminate in the selling to new investors of the banks taken

The government in an effort to improve manufacturing capacity approved the establishment of N200 billion Small and Medium E n t e r p r i s e s C r e d i t G u a r a n t e e S c h e m e (SMECGS) to promote access to credit by manufacturers and SMEs in Nigeria.


PRESIDENT'S STATEMENT (cont’d)

over in 2009 and subsequent recapitalization. Also, we are likely going to witness some merger arrangements in the banking sector.

With the approval of the Board of Directors of AMCON on November 3, 2010, members set to work immediately. At the end of the first Board of Directors meeting, AMCON approved the purchase of all the margin loans in the banking sector, including total non-performing loans (NPLs) of banks rescued by the CBN in 2009. The total loans to be purchased were initially estimated at about N2.2 trillion. AMCON had valued non-performing loans backed by shares of listed companies” at an implied premium of approximately 60 per cent on the 60-day average of recent prices, ending November 15, 2010.” On 31 December 2010, a total of N1.04trillion non performing loans were purchased from the banks with a three year initial consideration zero coupon bond which will subsequently be registered with SEC and become discountable at the CBN.

stAdditional purchases of NPL were scheduled for the first quarter of this year while it is planned that by 31 March all qualified NPL from all banks would have been purchased. It is not only the banks that would submit their toxic assets for purchase by AMCON. The Nigeria Deposit Insurance Corporation (NDIC) will also benefit from the initiative. It is believed that NDIC is carrying huge NPLs, presumably from the banks for which it (NDIC) continues to serve as undertaker, among which are the 14 banks that failed to meet the December 31, 2005, deadline for recapitalization. Most of the banks have however been sold to healthy ones under the CBN's purchase and assumption model for bank distress resolution.

The country's foreign reserves came under considerable pressure during 2010, especially from demand by foreign exchange users and as the CBN supported the exchange rate. This caused the depletion of the reserves by 24% from $42.41billion in December 2009 to $32.35 billion on December 31, 2010. An analysis of the movement in the reserve positions indicated that month-on-month, the level of reserves dropped between January and December within the range of (0.85) and (5.35) - negative. Reserve depletion was highest in the second quarter at 8.2% and lowest in the first quarter at 4.13%. The rate of depletion dropped in October and November, which may be attributed to the increased prices of crude oil, decline in demand for foreign exchange, rise in interest rates and efforts by the CBN to curtail massive depletion of the reserves, notably among which was the withdrawal of the licenses of all Class “A” Bureau De Change (BDC). Our in-house database indicated that $25.013 billion was committed to the official foreign exchange market in 97 bidding sessions.

The Naira/Dollar exchange was fairly stable during 2010. The nation's currency, the Naira, remained largely within CBN target of N150/$ while breaching on few instances. The exchange rate depreciated by 0.72% from N148.10/$ to N149.16/$ on year-on-year basis. The official exchange rate oscillated between N147.60/$ and N150.05/$. The CBN should be commended for the proactive measures to save the Naira from falling freely, especially in an era when most currencies are struggling to maintain their value. At the interbank market, the end period exchange rate indicated a depreciation by 0.33%, the rate having moved from N150.4/$ to N150.9/$. The gap between the official and parallel market rates dropped from N2.30 to N1.74 by year end. The Debt Management Office (DMO) put Nigeria's total public debt figure at $32.5 billion as at September 2010. The figure which represented 16.8 per cent of the country's Gross Domestic Product (GDP) was made up of $4.5 billion external and $28 billion internal debts. Consequently, Nigeria debt/GDP ratio was about 17 per cent compared with the global limit set at 40 per cent. In 2009, Nigeria owed $25.9 billion made up of $3.9 billion external and $21.9 billion internal debt. Nigeria's domestic debt is believed to have grown at the



fastest pace in 11 years during 2010. The growth in net domestic credit to the economy at 13.40% in December 2010 dropped from the 59.61% recorded in 2009. Unlike in 2009, however, credit to government grew faster than to the private sector, renewing fears of crowding out of the private sector borrowing. Credit to government grew by 75.21% on month on month basis (compared with 25.92% in 2009), while private sector credit contracted by 4.43% in 2010 (as against 26.63% growth recorded in 2009).

Inflation rate though moderated during the year, still remained on the high side despite reforms to curtail it. The National Bureau of Statistics (NBS) reduced the food component in the Consumer Price Index (CPI) by 13.1% from 69% to 50.7% while introducing an imported Food Index with a weight of 13.2%. Also, the agency revised the Consumer Price Index (CPI) based on Nigeria Living Standard Survey (NLSS) 2003/2004 while adopting November 2009 as the base period for the computation of the consumer price index (CPI). Hitherto, May 2003 was applied as the base period. Though the base period change resulted in higher inflationary figures, however, the year-on-year (YoY) inflation dropped to 13.6% at the end of the third quarter compared with 14.1% at the end of the second quarter while further decelerating to 11.8% in December 2010. The 12-month average (YoY) Inflation rate was 13.8% compared with 12.6% in 2009. The target in 2010 was to achieve an inflation rate of 11.2%, which was elusive throughout the year as the rate oscillated between 12.8 and 15.6 per cent during the year. With average all-maturities at below 10 percent, the real rate of interest is negative, with serious implications for investments.

In a bid to contain inflation amid concerns over rising liquidity, CBN at the meeting of the Monetary Policy Committee on September 21, 2010 increased the Monetary Policy Rate (MPR) by 25 basis points from 6% to 6.25%. The money market operated within the burst-boom cycle with the later defined by the release of statutory allocations. The average all-maturities Nigerian Interbank Offer rate (NIBOR) was 8.62%, lower than the 16.24% recorded in 2009. The average rate was lowest during the third quarter at 6.20%. However, rates spiked higher during the fourth quarter averaging 12% in response to liquidity pressure and the apex bank's monetary tightening measures.

In its latest rating, Standard & Poor's affirmed its B+ long-term rating on Nigeria with a stable outlook. It also affirmed B short-term foreign and local currency sovereign credit ratings on Nigeria. The agency claimed the outlook is stable, reflecting expectation that Nigeria will maintain its strong external and fiscal balance sheet and that its budgetary performance will gradually improve over the next few years. Fitch had recently lowered its sovereign credit outlook on Nigeria's BB-rating from stable to negative because of withdrawals from the Excess Crude Account and a drop in foreign currency reserves, as well as heightened political uncertainty.

A survey on socio-economic activities, jointly conducted by the National Bureau of Statistics (NBS), CBN and the Nigerian Communications Commission in March 2009 indicated that the national average unemployment rate increased from 14.9% in 2008 to 19.7 per cent in 2009. Also, unemployment rates in 16 states, including the Federal Capital Territory were higher than the national average. The high incidence of unemployment amid economic growth reveals major dislocations in Nigeria's socio-economic system. According to the United Nations Development Programme (UNDP), 70% of Nigeria's population live below the poverty line.

Credit to government grew by 75.21% on month on month basis (compared with 25.92% in 2009), while p r i v a t e s e c t o r c r e d i t contracted by 4.43% in 2010 (as against 26.63% growth recorded in 2009).



Higher proportion of unemployment was found to be prevalent among secondary school leavers. To solve the problem of unemployment, the Federal Government on July 16, 2010 inaugurated the private sector led-National Committee on Job Creation to tackle the increasing rate of unemployment across the country. In its final report, the Committee asserted that over 15 million new jobs could be created over the next five years if its recommendations are thoughtfully implemented. The report prioritized target sectors including agriculture and (agro-allied industries) manufacturing, and building and construction as areas having strong and natural comparative advantage where job creation chances could be remarkable.

The contributory pension scheme continued to work as planned. To keep the industry afoot, the National Pension Commission (PenCom) worked assiduously to ensure that organizations abide by the rules governing the sector. By August 2010, assets worth N1.8 trillion had accumulated in the pension industry with about 67 per cent of the amount realized from the private sector. Also, by July 2010, 4.3 million workers have registered with the Pension Fund Administrators (PFAs) under the contributory pension scheme. The commission continued to issue additional guidelines and regulations to further guide operations in the pension industry to entrench sound corporate governance in the activities of pension operators. PENCOM issued revised guidelines for pension funds in December 2010. These guidelines permit PFAs to invest in infrastructure funds and foreign currency bonds issued by Multilateral Development Finance Organizations (MDFOs) like the International Bank for Reconstruction and Development (World Bank), African Finance Corporation (AFC), African Development Bank (ADB) and the International Monetary Fund (IMF), among others. Under the new guidelines, pension assets can also now also be invested in foreign currency denominated bonds issued by the Federal Government of Nigeria (FGN), or the CBN or agencies and companies owned by the Federal Government provided that the securities are fully guaranteed by the CBN or Federal Government. Infrastructure bonds issued by corporate entities are also allowable investments; along with bonds, debentures, redeemable and convertible preference shares, and other debt instruments including asset backed securities.

The harsh operating environment led to mixed performance by listed companies as shown in their interim and final reports. Declining incomes and savings attributed to rising unemployment, weakened purchasing power arising from inflationary pressure, and investors' apathy caused a decline in the participation of Nigerians in the stock market. Similarly, the rise in interest rates especially during the fourth quarter, profit taking and absence of margin facilities exerted downward pressure on the stock market. The huge margin loans overhang contributed to the lull in the capital market as banks withheld funding acquisition of equities by investors. Besides, banks offloaded shares to reduce their exposure to margin loans as directed by the apex bank while profit taking by investors dictated the pace of movements in key indicators. The decline in deposit interest rates during the first quarter enabled the stock market to recover some of the losses recorded during the preceding years. We note however that the investors' pessimism that was widespread after two consecutive years of losses in 2008 and 2009 gradually gave way to cautious optimism as the various confidence building measures initiated by the regulatory authorities such as: the introduction of Asset Management Company of Nigeria (AMCON), zero tolerance for market infractions and compliance with post listing requirements, begin to yield results. Despite the 25 basis points increase in the Monetary Policy Rate (MPR) and the subsequent rise in interest rates in September, most stock market indicators recorded positive changes during the fourth quarter. The value of total volume of transactions on The Exchange closed the year at N797.551 billion (or 3.22% of GDP). Hence, while value traded rose by 16.31%, volume traded dropped by 9.25% from the 102.85 billion

Stock Market Activity



valued at N685.72 billion (2.9% of GDP) recorded in 2009. Volume and value traded had in 2009 dropped by 46.75% and 71.43%, respectively. Average daily activity dropped from 414.73 million shares worth N2.8 billion in 2009 to 377.9 million shares valued at N3.2 billion in 2010.

The bulk of the transactions were in equities, which accounted for N797.54 billion or 99.99% of the turnover value compared to N685.3 billion or 99.94% recorded in 2009. Transactions in the State Government bonds sector were very minimal accounting for only 13,000 units valued at N14.14 million. However, trading in Industrial bonds and Preference Stock sectors were inactive compared to N412.8 million traded in 2009. In 2010 just as in 2009, trading in Federal Government bonds on The Exchange was inactive. Significantly, a turnover of 13.8 billion units valued at N15.34 trillion in 137,080 deals was recorded in the Over-the-Counter (OTC) market for Federal Government bonds, as against 17.1 billion units valued at N10.44 billion in 78,248 deals recorded in that market in 2009.

The number of securities listed on The Exchange dropped from 266 in 2009 to 264 in 2010. Of these 264 securities, 217 were equities. The total market value of 264 securities listed on The Exchange increased by 41.12% from N7.03 trillion to stand at N9.92 trillion by year-end. The rise in market capitalization resulted mainly from new listings of equities and state government bonds coupled with price appreciation by equities. Market capitalization had in 2009 declined by 26.5%. By year-end, the market capitalization of the 217 listed equities accounted for N7.92 trillion or 79.85 per cent of the aggregate market capitalization (2009: 216 equities accounted for N5 trillion or 71.04 per cent of market capitalization). Also, by year-end, seventeen (17) subsectors recorded increased market capitalization of between 3.9% and 622.05% while sixteen (16) subsectors suffered reduction in market capitalization of between 2.8% and 48%. Two subsectors (Machinery Marketing and Aviation) did not record a change in market capitalization. The Nigerian Stock Exchange All-Share Index increased by 3,943.35 points or 18.5% to close at 24,770.52. The NSE ASI had in 2009 dropped by 33.8% or 10,623.61 points to close at 20,827.17. The performance of the Index reflects the increase in the prices of quoted equities during the year. By year end, 68 stocks recorded price appreciations and 95 stocks recorded price declines while the prices of 54 remained constant. In 2009, 23 stocks recorded price appreciations and 159 stocks recorded price declines while the prices of 35 remained constant. Also, the NSE-30 Index in 2010 increased by 253.96 points or 28.01% to close at 1,081.95, a reversal from the decline by 25.44 points or 3% suffered in 2009. The Primary Market was more active during 2010 than in 2009. This can be attributed to the relative stability recorded in the stock market, which boosted investors' confidence. The Exchange considered and approved thirty-one (31) applications for new issues valued at N2.44 trillion or 9.83% of GDP, as against thirty (30) applications for new issues valued at N279.25 billion or 1.2% of GDP in 2009.

The non-bank corporate issues accounted for 90.5% with nineteen (19) applications valued at N2.21 trillion

T h e N a t i o n a l P e n s i o n C o m m i s s i o n ( P e n C o m ) worked assiduously to ensure that organizations abide by the rules governing the sector. By August 2010, assets worth N1.8 trillion had accumulated in the pension industry with about 67 per cent of the amount realized from the private sector.



while the banking sector accounted for 5.41% with eight (8) applications valued at N131.8 billion. States Government bond issue with four (4) applications accounted for N88 billion or 3.6% of the total amount approved during the year. Of the non-bank applications, the Building Materials subsector with one (1) application accounted for N2.1 trillion or 86% of the approved new issues. Similarly, the Insurance subsector with four (4) applications accounted for N6.32 billion or 0.3% of the total applications considered.

In 2009, the non-bank corporate issues accounted for 71.5% with 25 applications valued at N199.65 billion while the banking sector accounted for 3.6% with 1 application valued at N10.1 billion. States Government bond issue accounted for N69.5 billion or 24.9% of the total amount approved during the year. Of the non-bank applications, the Foreign Listings and Insurance subsectors accounted for N27.5 billion and N33.22 billion or 9.84% and 11.9%, respectively of total applications considered.

Further analysis of new issues approved in 2010 showed that no new IPO was approved in 2010, same as in 2009 while N46.6 billion was raised through rights issues; and N173.7 billion through bonds issue, including the four (4) State Government Bonds. Listings by Introduction accounted for N17.7 billion while Shares Placing with ten (10) applications accounted for N92.8 billion and Mergers with two (2) applications accounted for N2.1 trillion. Also approved were four applications by Unit Trusts for memorandum listings valued at N12.7 billion.

As in previous years, there were certain developments in the market in 2010 which had some effects on broadening participation, expanding services, improving liquidity, and generally propelling the market to greater heights. Some of these developments are still work in progress and they include the following:

Extension of Trading HoursThe trading hours were extended by two hours daily from 9.30am to 2.30pm from the erstwhile trading time of 9.30am to 12.30pm. The new trading time became effective on December 6, 2010. The extension of the trading hours became necessary in order to give an opportunity for on line real time participation to a wider range of investors located in different time zones. Upgrading the Exchange's Trading Platform We commenced discussions with notable global vendors to purchase a new trading platform for The Exchange. The Exchange created an ad-hoc stakeholders Committee comprised of staff of the Exchange and market operators to ensure that the envisaged trading platform comes with improved functionalities that would impact positively on trading on The Exchange. By December 2010, The Exchange had decided to purchase the platform from one of the vendors. During 2011, it is expected that a final contract will be entered into with this vendor following detailed negotiations.

Meanwhile, the existing market infrastructure remains sound and capable of meeting the current needs of

Market Development

new issues approved in 2010 showed that no new IPO was approved in 2010, same as in 2009 while N46.6 billion was raised through rights issues; and N173.7 billion through bonds issue, including the four (4) State Government Bonds.



investors, issuers of securities, and market operators.

The Index CommitteeFor the first time in the Exchange, we have in place an Index Committee comprised of diverse analysts complemented with an external adviser. The goal of the Committee is to ensure that the NSE 30 and Sectorial Indices remain leading indicators of the Nigerian equities market, reflecting the risk and return characteristics of the broader All-share index on an on-going basis. Also, the Index Committee monitors constituent liquidity to ensure efficient portfolio trading while keeping index turnover to a minimum. In this instance, members strive to minimize unnecessary turnover in index membership and each removal is determined on a case-by-case basis.

The NSE Index Committee follows a set of published guidelines for maintaining the indices. Complete details of these guidelines, including the criteria for index additions and removals are available in the NSE Factbook 2009 and on the official website of The Exchange http://www.nigerianstockexchange.com. These guidelines provide the transparency required and fairness needed to enable investors to replicate the index and achieve the same performance as The Exchange.

New ProductsThe Exchange is committed to introducing new tradable instruments as the market develops. During the year, SEC released the proposed draft rules on Exchange Traded Funds while the Exchange is working on the designing the listing requirements for the instrument. We expect ETF trading to debut in our market in 2011 and in preparation, both SEC and NSE are involved in capacity building preparatory to its take off.

Strict Enforcement of The Exchange's Rules and Post Listing RequirementsWe observed some lapses in the enforcement of post listing rules on our quoted companies, particularly as they relate to corporate reporting of interim and final audited accounts. Also, market operators were below par in the observance of the code of conduct. Consequently, under the direction of the Council, Management has taken initiatives to resolve the problem. In relation to our dealing members, new guidelines for their financial reporting for interims have been issued recently and compliance with these new guidelines is being strictly enforced.

The principle of fairness as contained in The Exchange's Mission Statement requires that we must continually be guided by the strict adherence to the post listing rules of The Exchange and more importantly the principles of corporate governance while ensuring fairness to all our stakeholders. No doubt some of the actions taken so far may have been rather drastic, we took them believing they are noble and would in the medium to long term propel the Nigerian stock market on the path to a self sustaining growth. For us to be taken seriously as a global player, we must work by the rules and ensure strict adherence as obtained in other climes. The various confidence building measures instituted by Council have started to stabilize the market and build investors' confidence. World Federation of Exchanges (WFE)Renewed efforts commenced recently at ensuring that the Exchange fulfills the requirements for membership of the World Federation of Exchange (WFE). In so doing, a baseline for improving the governance structure of the Exchange as well as the market at large (as it relates to compliance by our listed companies with post listing requirements) have been established.



Inspection of Dealing Member FirmsA total of 251 stock brokerage firms were inspected out of the 262 scheduled for inspection. The remaining firms had their inspections rescheduled. Several firms reported trading losses and negative shareholders funds. Most of them attributed this development to the financial crisis that followed the economic downturn. They have been advised to inject fresh funds and return their firms to profitability.

New Dealing Member Firms The Exchange conducted pre-trading inspections on the under-listed nine (9) firms compared with six (6) in 2009:

1. Dunbell Securities Limited

2. Covenant Securities Asset Management Limited

3. DSC Brokerage Services Limited

4. Bauchi Investment Corporation Securities Limited

5. Gem Asset Management Limited

6. Waila Securities & Funds Limited

7. Global View Consult & Investment Limited

8. Gombe Securities Limited

9. Consortium Investments Limited a/k/a Kedari Securities Limited

As at December 23, 2010, all the new firms had commenced trading except for DSC Brokerage Services Limited which is yet to be cleared for trading.

Branch Opening During 2010, the following six (6) Dealing Member firms (compared to seven (7) in 2009) opened branch offices and inspections were conducted to determine the suitability of the offices for stock brokerage activities:

1. Citi Investment Capital Limited 2. Spring Trust & Investment Limited3. Skyview Capital Limited4. Waila Securities & Funds Limited 5. Plural Securities Limited6. EDC Securities Limited

All the branch offices met the requirements for operating stock brokerage businesses viz cashless transactions, imbibing “Know Your Client” (KYC) principles, centralized operations and engagement of qualified personnel. Complaints/InfractionsA total of 449 complaints were received in 2010 compared to 249 during 2009. Of the complaints received, of 360 were against active Dealing Member firms while eighty (80) were against non-dealing members and nine (9) against inactive houses. A total of 135 complaints were resolved while 231 are still being investigated pending resolution.



The Exchange observes that complaints of unauthorized sales and failure to remit proceeds of sales continue to persist in the market. This can be attributed to illiquidity suffered by the majority of Dealing Member Firms, the high loan exposure of many Dealing Member firms and the desperate efforts of the banks to recoup outstanding facilities.

In addition, it was observed that some Dealing firms do not comply with the Know Your Client (KYC) requirements set forth in Article 102 of the Rules and Regulations Governing Dealing. As a result, fraudulent sales have occurred based on instructions from persons who are not the true owners of the securities. Violation of Rules of The ExchangeDuring the year, seventy-four (74) Dealing firms were suspended for failure to submit Audited Accounts for 2008, 2009 and 2010 accounting years, respectively compared to six (6) during 2009. This is contrary to Article 15 (H) of the Rules and Regulations Governing Dealing Members.

Also, a new reporting format for the rendition of interim reports meant to provide uniform reporting and ease of comparison of members was introduced. The implementation of this format has commenced. Similarly, during 2011, The Exchange has been enforcing the following rules against Dealing firms:

1. Separation of client accounts from that of the Dealing Member Firm;2. Rendition of returns to the Exchange as and when due.

The global economy is gradually recovering from the impact of the economic meltdown. The International Monetary Fund (IMF) in the latest World Economic Outlook posited that the continent of Africa would grow by 5.5 percent in 2011 while Nigeria is expected to grow by 7.4 per cent. The International Monetary Fund, at its last annual meeting in Washington DC rated the Nigerian economy as third fastest growing globally after China and India. The Federal Government expects a GDP growth rate of 7% in 2011.

Over the medium term, it is expected that economic growth will continue to be driven by the non-oil sector. However, a structural shift in the economy is expected to begin as sectors such as manufacturing, telecommunications, wholesale and retail trade amongst others increase their contributions to GDP growth. Investments in critical infrastructure and cont inued focus on promoting macroeconomic stability are expected to facilitate this shift in the economy. Perhaps the icing on the cake would be the increased in local refining capacity of petroleum products, which would reduce importation and government expenditure on subsidy. It is hoped that with the new policies and programmes being implemented by the Federal Government and complemented by existing ones, the economy would witness a turnaround in the medium term. The nation's domestic and the international capital market promises to be very busy as from the month of January, as the Federal Government and various government agencies source funds from both markets. The Asset Management Corporation of Nigeria (AMCON) is expected to register and issue an estimated N3 trillion zero coupon ten year bond to enable the corporation buy toxic

Outlook

The Exchange observes tha t compla in ts o f unauthorized sales and failure to remit proceeds of sales continue to persist in the market.



assets off the books of the banks. Meanwhile, the sustained expansion in public borrowing risks crowding out the private sector.

Inflationary risk will remain a threat in the months ahead due to the implementation of the 64% increased minimum wage to N18,000 in the public service, rising government borrowing and the expected increased political spending up to the 2011 general elections combined with releases from the Excess Crude Account (ECA). We expect some manufacturing companies to beef up their capital bases using instruments available in the market, particularly rights and medium tenor bond. The initial preparation for the demutualization of the Exchange has commenced. Other issues that have and will continue to demand the attention of the Council and Management in 2011 include the following:

How to broaden and deepen the market both in terms of tradable asset class on our platform and participants in the market;

The introduction of market makers, which would bring some fundamental changes in our trading processes as well as licensing of Designated Advisers, who will anchor the operations of the Alternative Securities Market (ASEM);

Provision of alternative capital raising mechanisms that will deepen the market and improve liquidity;Intensifying collaboration between the SEC, The Exchange and our Clearinghouse, the Central Securities and Clearing System, (CSCS) for the full dematerialization of share certificates still being held outside CSCS;

Resolving issues surrounding stock lending and stock borrowing to allow these activities debut in our market;

Extending and deepening existing partnerships with other Exchanges, on the continent and other parts of the world;

Securing membership of World Federation of Exchanges (WFE).

More importantly, we expect the debut of new tradable instruments in our market during 2011, including Exchange Traded Funds (ETFs) while we will continue to strengthen existing instruments like the Bond Market and Real Estate Investment Trusts (REITs). REITS, which debuted in our market in 2008, are no doubt facing challenges, chief among which are limited product awareness and liquidity. Efforts will be made to tackle these challenges in 2011.

The Federal Government through the Debt Management Office (DMO) and the CBN sustained the Sovereign Bond issuance programme. However, for the purpose of transparency and pricing efficiency, we once again request that the DMO consider migrating trading on the OTC to The Exchange's trading platform, which has the technology to deliver on transparency and efficiency. We request DMO and CBN to hasten the process of listing the FGN Bonds after the auction process had been concluded so as to ensure prompt secondary market trading.



Over time, we have brought to the fore the challenges militating against the further development of the Nigerian capital market. These challenges include the incidence of multiple tax regimes on businesses and investors and the slow pace in the implementation of the privatization programme, especially of those entities ear marked for privatization via the stock market. It is necessary for the National Assembly to expedite the enactment of appropriate legislation to address these challenges.

The Exchange will continuously work to support government and its agencies towards the realization of Nigeria's economic development and growth objectives, working closely with the Federal Ministry of Finance, CBN, SEC and other members of the Financial Sector Regulation Coordinating Committee (FSRCC), while maintaining relationship with operators in the international arena with a view to facilitating the flow of international investment capital to Nigeria. We will continue to take pro-active measures that will enhance the quality of the overall market.

In a regulatory move on 4 August 2010, the SEC intervened in the management of The Exchange. On 5 August, the SEC removed Prof. Ndi Okereke-Onyiuke as Director-General of The Exchange. The SEC also directed Alhaji Aliko Dangote to cease acting as President of the Council of The Exchange in compliance with a court order nullifying his election as President and pending the outcome of ongoing litigation. Consequently, the SEC established an interim administration for The Exchange by appointing Mr. Emmanuel Ikazoboh and I as Interim Administrator and Interim Head of Council respectively.

Key among the mandates of the SEC to the interim administration was the appointment of a new executive management for The Exchange. On 4 April 2011, following a rigorous selection process, Mr. Oscar Onyema assumed office as The Exchange's new Chief Executive Officer. The SEC directed that Mr. Ikazoboh should overlap with Mr. Onyema for one month to enable a proper handover, following which Mr. Ikazoboh ceased to be the Interim Administrator of The Exchange. The SEC further directed that The Exchange should admit to membership of The Council six (6) professionals as an interim measure in the public interest in order to strengthen the Council and support the new management team. Together with Mr. Ikazoboh and I, these six professionals are to work with existing Council members to achieve a number of objectives, including guiding the new management team for a period of time. It is my pleasure to report the excellent contributions of these six professionals to Council deliberations and decisions.

On your behalf, I thank members of Council for their steadfastness and quality advice during the year. I welcome the new members of Council with whom we hope to take The Exchange to greater heights. Finally, I thank the management of The Exchange for their loyalty and the invaluable role they are playing as we seek to achieve our vision of becoming the leading stock exchange in Sub-Saharan African.Thank you.


Intervention by the Securities and Exchange Commission, Nigeria

Conclusion


HIGHLIGHTS OF THE YEAR

2009 2010 % Change

Market Capitalization N7.03tr N9.92tr 41.1

The NSE All-Share Index 20,827.17 24,770.52 18.9

The NSE 30 Index 827.99 1,081.95 30.7

The NSE Food/Beverage Index 526.71 778.47 47.8

The NSE Banking Index 339.32 399.08 17.6

The NSE Insurance Index 249.01 168.34 (32.4)

The NSE Oil/Gas Index 288.06 338.85 17.63

Total Turnover Volume 102.85b shares 93.335b shares (9.25)

Total Value of Shares Traded N685.72b N797.55b 16.31

Average Daily Volume 414.73m units 377.9m units (8.9)

Average Daily Turnover N2.76b N3.23b 17.02

New Issues Approved N279.25b N2.44tr 772.8

Number of Applications Considered 30 29 (3.3)

Number of Listed Companies 216 217 (0.5

Number of Listed Securities 265 264 (0.4)

Number of Trading Days 248 247 (0.4)

Performance in US Dollars 2009 2010 % Change

Market Capitalization $47.75b $66.24b 38.72

Total Turnover Value $4.7b $5.34b 13.62

Average Daily Turnover $18.8m $21.56m 14.68

New Issues Approved $1.9b $16.3b 757.89

Average Exchange Rate of N149.79/$


REPORT OF THE COUNCILFOR THE YEAR ENDED 31 DECEMBER, 2010

The Council Members submit their report together with the financial statements of The Exchange for the year ended 31 December 2010.

1. RESULTS '000

Group operating surplus of the Exchange fo r 2010 was 357,949

Transfer to development fund -

Retained surplus of the Group for the year transferred to accumulated fund 357,949

2. PRINCIPAL ACTIVITIES

The principal activity of the Exchange is to provide facilities to the public for the purchase and sale of

securities of any kind.

3. LEGAL FORM

The Exchange was incorporated in Nigeria as a private company limited by shares on 15 September 1960 as Lagos Stock Exchange and its name was changed to The Nigerian Stock Exchange on 15 December1977.The company was re-incorporated as a company limited by guarantee on 18 December 1990.

4. COUNCIL MEMBERS

i. The Members of Council are listed on page 04.

ii. Under clause 5(9) of the Articles of Association, Alhaji Bello Maccido, Mr. Nsa Harrison, Mr. Emmanuel Ikazoboh, Mrs. Yemisi Ayeni, Mr. Abubakar Mahmoud, SAN, Mr. Abimbola Ogunbanjo, Mr. Bismarck

Rewane, Mrs. Dorothy Ufot, SAN, Mr. Hassan Usman, Katsina State Investment & Property Development Company Limited, Partnership Investment Company Limited, WSTC Financial Services Limited, Reward

Investments & Services Limited, APT Funds and Securities Limited, City-Code Trust & Investment Limited, ICON Stockbrokers Limited, and StanbicIBTC Stockbrokers Limited were co-opted onto Council and offer themselves for election.

iii. UNEX Capital Limited, which was co-opted onto the Council on 13 August 2008 resigned its

membership of the Council by a letter dated 12 October 2011. Chief Reginald Abbey Hart, MON,

having completed his three year term as Second Vice-President of The Exchange retires from the

Council. Dr. Erastus Akingbola, OON having been a Council Member since 2007, also retires from

the Council.

5. FIXED ASSETS

Movements in fixed assets during the year are shown in note 2 on page 32. In the opinion of the Council

Members, the market value of the company's properties is not less than the value shown in the financial

statements.



6. COUNCIL MEMBERS' RESPONSIBILITIES

The Council Members are responsible for the preparation of financial statements which give a true and fair view of the state of affairs and comply with the Companies and Allied Matters Act Cap C20 LFN 2004. They are obliged to ensure that:

- Proper accounting records are maintained;

- Internal control procedures are instituted which, as far as is reasonably possible;

safeguard the assets, prevent and detect fraud and other irregularities;

- Applicable accounting standards are followed;

- Judgments and estimates made are reasonable and prudent;

- Suitable accounting policies are adopted and consistently applied; and

- The going concern basis is used, unless it is inappropriate to presume that the company

will continue in business.

7. POST BALANCE SHEET EVENTS

Council Members are not aware of any significant post balance sheet events which could have had a material effect on the state of affairs of The Exchange as at 31 December 2010 which have not been adequately provided for or disclosed.

8. EMPLOYMENT AND EMPLOYEES

i. Persons with Physical Disabilities

Applications for employment by persons with physical disabilities are given full and fair consideration having regard to the aptitude and ability of each applicant. As of 31 December 2010, The Exchange had one employee with physical disabilities.

ii. Health and Safety

The Exchange accords the greatest priority to health and safety in its operations. The Exchange retains for use by employees and their families, the services of consulting medical organizations in all cities in which it has offices.

iii. Personnel Communication

The Exchange is committed to keeping employees fully informed as much as possible regarding its performance and progress and seeking their views whenever practicable on matters which particularly affect them as employees.

iv. Training and Development

It is the policy of the Exchange to apply a uniform training and development program to all employees. In accordance with the company's policy of continuous development of its



manpower resources, a great effort is made to ensure that training courses meet specific needs of the nominated employee. During the year under review, some staff went on overseas training while many others attended local courses.

9. AUDITORS

In accordance with section 357(2) of the Companies and Allied Matters Act CAP C20 LFN 2004, Messrs

Akintola Williams Deloitte have indicated their willingness to continue in office. A resolution authorizing

the Council Members to determine their remuneration shall be proposed at the next annual general

meeting.

BY ORDER OF THE COUNCIL.

TINUADE T. AWEACTING SECRETARY TO COUNCIL

LAGOS, NIGERIA

October 11, 2011


REPORT OF THE INDEPENDENT AUDITORSTO THE MEMBERS OF THE NIGERIAN STOCK EXCHANGE

We have audited the accompanying consolidated financial statements of The Nigerian Stock Exchange (“The Exchange”) and its subsidiaries (together, “The Group”) set out on pages 23 to 28, which comprise the consolidated balance sheet as at 31 December 2010, the consolidated income statement, and consolidated statement of cash flows for the year then ended, summary of significant accounting policies, value added, financial summary and other explanatory information.

The Council is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with the Companies and Allied Matters Act CAP C20 LFN 2004, and for such internal control as the Council determine is necessary, to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Council, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of The Exchange and its Subsidiaries as at 31 December 2010, and of its financial performance and its cash flows for the year then ended; the Exchange and its Subsidiaries have kept proper books of account, which are in agreement with the consolidated balance sheet and consolidated income statement, in a manner required by the Companies and Allied Matters Act, Cap C20 LFN 2004, and, in accordance with the Statements of Accounting Standard issued by the Nigerian Accounting Standards Board.

Council's Responsibility for the Consolidated Financial Statements

Auditors' Responsibility

Opinion

DeloitteAkintola Williams Deloitte

235 Ikorodu Road, Ilupeju

P.O. Box 965, Marina

Lagos

Nigeria

Tel: +234 (1) 271 7800

Fax: +234 (1) 271 7801

www.deloitte.com/ng


Emphasis of matterWe draw attention to the basis for qualification of the consolidated financial statements as at 31 December, 2009 regarding contraventions of section 26(3) of Companies and Allied Matters Act, Cap C20 LFN 2004 and section 6 of the Memorandum and Articles of Association of the Exchange. We are not aware of similar contraventions during the year ended 31 December 2010. Our opinion is not qualified in respect of this matter.

Chartered AccountantsLagos, Nigeria21 July 2011

REPORT OF THE INDEPENDENT AUDITORSTO THE MEMBERS OF THE NIGERIAN STOCK EXCHANGE


STATEMENT OF SIGNIFICANT ACCOUNTING POLICIESFOR THE YEAR ENDED 31 DECEMBER 2010

The principal accounting policies adopted in the preparation of these financial statements are set out below:

1. Basis of accountingThe financial statements are prepared under the historical cost convention modified by the revaluation of fixed assets and comply with the Statement of Accounting Standards issued by the Nigerian Accounting Standards Board.

2. Consolidation Subsidiary undertakings, are those companies in which the Exchange, directly or indirectly, has an interest of more than half of the voting rights or otherwise has power to exercise control over their operations.

The acquisition method is used to account for business combinations. The cost of an acquisition is measured as the market value of assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their market values at acquisition over the Group's share of identifiable net assets of the subsidiary acquired, the difference is recognized directly in profit and loss account.

Inter-company transactions, balances and unrealized gains on transactions between Group Companies are eliminated. Unrealized losses are also eliminated unless the transactions provide evidence of impairment of the asset transferred.

3. AssociateAn Associate is an entity in which the Group has significant influence, but not control over the operating and financing management policy decisions. This is generally demonstrated by the Group holding the excess of 20%, but not more than 50% of the voting rights.

Investments in associates are accounted for by the equity method of accounting and are initially recognized at cost. The Group's investment in associates includes goodwill (net of any accumulated impairment loss) identified on acquisition. The Group's share of its associates' post acquisition profit or losses is recognized in the income statement; its share of post-acquisition movement in reserves is recognized in reserves.

The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the Group's share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognize further losses unless it has incurred obligations or made payments on behalf of the associate.

4. Gross fees Gross fees comprise the value of annual quotation, entrance and transaction levies charged companies dealing with the Exchange. These include listing fees, entrance levy, and transaction levy:

4.1 Listing feesListing fees represents the annual fees charged on companies quoted on the Exchange based on average annual capitalisation of companies and is accounted for on accrual basis.


4.2 Entrance levyEntrance levy represents the fee charged on companies sourcing funds from the capital market and is based on the amount of funds being sought.

4.3 Transaction levyTransaction levy is based on value of shares traded on the floor of The Nigerian Stock Exchange charged on the investors at 0.50% of sales, this was reduced to 0.30% in August of 2008 and is accounted for on an accrual basis.

5. Investments in securitiesThe group categorises its investment securities into the following categories: long term quoted investment and unquoted investment. Investment securities are initially recognized at cost and Management determines the classification at initial investment.

5.1 Long term investmentLong-term investments are investments held by management over a long period of time to earn income. Long-term investments may include debt and equity securities.

Long-term investments are carried at cost less impairment. An investment is impaired if its carrying amount is greater than its estimated recoverable amount. The amount of the impairment loss for assets carried is calculated as the difference between the assets carrying amount and the market value.

Interest earned whilst holding investment securities is reported as interest income. Dividend receivable is included separately in dividend income when a dividend is declared. A change in the market value of investment securities is not taken into account unless it is considered to be permanent.

6. Investment in subsidiariesInvestments in subsidiaries are carried in the Exchange's balance sheet at cost, less provisions for impairment losses. Where, in the opinion of the management, there has been impairment in the value of an investment, the loss is recognized as an expense in the period in which the impairment is identified.

On disposal of an investment, the difference between the net disposal proceeds and the carrying amount is charged or credited to the profit and loss account.

7. DebtorsDebtors are stated after making provision for balances considered bad or doubtful of recovery.

8. Fixed assetsAll property, plant and equipment are initially recorded at cost. They are subsequently stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the assets.

Subsequent costs are included in the asset's carrying amount or are recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with asset will flow to the Group and the cost of the asset can be measured reliably. All other repairs and maintenance are charged to the profit and loss account during the financial period in which they are incurred.

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIESFOR THE YEAR ENDED 31 DECEMBER 2010 (Cont’d)



Construction cost in respect of offices is carried at cost as work in progress. On completion of construction, the related amounts are transferred to the appropriate category of property, plant and equipment. Payments in advance for items of property, plant and equipment are included as prepayments in other assets and upon delivery are reclassified as additions in the appropriate category of property, plant and equipment. No depreciation is charged until the assets are put into use.

Depreciation is calculated on a straight line basis to write down cost of property, plant and equipment to their residual values over their estimated useful lives as follows:

%

Motor vehicles - 25 Furniture, fixtures and fittings - 12.5

Office equipment - 20Leasehold improvements - 2Freehold buildings - 2

Gains and losses on disposal are determined by comparing proceeds with the carrying amount. These are included in the profit and loss account for the year.

Where items of property, plant and equipment are subsequently carried at revalued amounts, an entire class of property, plant and equipment is revalued or the selection of the items for revaluation is done on a systematic manner.

Any accumulated depreciation at the date of revaluation is not credited to profit and loss account or retained profit.

On revaluation of property, plant and equipment, an increase in the net book value is credited to a revaluation surplus reserve. A decrease in the net book value is used to reduce the amount of any existing revaluation surplus on the same item before it is charged to profit and loss account.

Upon sale or disposal of an item of property, plant and equipment, the difference between the proceeds and the net book value is transferred to profit and loss account. Any balance in the revaluation surplus reserve in respect of such items is transferred to income and expenditure account.

Subsequent depreciation on revalued items of property, plant and equipment is calculated on the new value and charged to income.

Freehold buildings are periodically revalued every 5 years by external professional valuers.

9. Foreign currenciesTransactions in foreign currencies are translated to Naira at the rates of exchange ruling at the dates of the transactions. Foreign currency balances are converted to Naira at the rates of exchange ruling at the balance sheet date. Exchange differences are included in the income and expenditure account.



10. TaxationIncome tax is provided on taxable profit at the current statutory tax rate. The Exchange in 2004 exercised its rights under Section 23(1) of Companies Income Tax Act, CAP 21, LFN 2004 (as amended) to apply for tax exempt status. The Federal Board of Inland Revenue upheld that the income of the Exchange is not liable to tax since it is a company limited by guarantee.

11. Deferred taxationProvision for deferred taxation is made by the liability method and calculated at the current rate of taxation on the differences between the net book value of fixed assets qualifying for capital allowances and their corresponding tax written down value.

12. Staff gratuity and pensionsThe Group has both defined benefit gratuity scheme and contributory pension scheme.

A defined benefit gratuity plan is a plan that defines an amount of gratuity benefit that an employee will receive on retirement, usually dependent on one or more factors, such as years of service and compensation.

A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. In a defined contribution plan, the Group makes contributions on behalf of qualifying employee to a mandatory scheme under the provisions of the Pension Reform Act of 2004. The Group has no further payment obligations once the contributions have been paid. The contributions are recognized as employee benefit expense when they are due.

13. Contingent liabilities A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non- occurrence of one or more uncertain future events, not wholly within the control of the Group, or the Group has a present obligation as a result of past events but is not recognized because it is not likely that an outflow of resources will be required to settle the obligation; or the amount cannot be reliably estimated.

Contingent liabilities normally comprise of legal claims under arbitration or court process in respect of which a liability is not likely to eventuate.

14. GoodwillGoodwill represents the excess of the cost of an acquisition over the fair value of the Group's share of the net identifiable assets of the acquired subsidiary/associate at the date of acquisition. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisition of associates is included in investments in associates. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity included the carrying amount of goodwill relating to the entity sold.

15. Cash and cash equivalentCash comprises cash on hand and demand deposits denominated in Naira. Cash equivalents are short-term, highly liquid instruments which are:



a) Readily available into cash, whether in local or foreign currency; andb) So near to their maturity dates as to present insignificant risk of changes in value, as a result of

changes in interest rates.

16. Segment reportingA business segment is a distinguishable component of the company that is engaged in providing related products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and returns that are different from those of other segments. Segment information is required to be presented in respect of the group's business segments, where applicable.

The group's primary format for segment reporting is based on business segments. The business segments are determined by management based on the group's internal reporting structure.

Segment result, asset and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.


BALANCE SHEETAS AT 31 DECEMBER, 2010

ASSETS

Fixed assets

Investment in subsidiariesInvestment in associated company

Investment in quoted equitiesGoodwill

InventoriesDebtors and prepayments

Construction in progressInter company balancesCash and short term funds

TOTAL ASSETS

LIABILITIES

Due within one year:Fees received in advanceCreditors and accruals

Security depositsTaxation

Due after one year:Staff gratuity and pensionDeferred taxation

RESERVES

Accumulated fund

Revaluation reserve

Note

2

34

56

78

91011

1213

1415

1617

18

19

2010

N'000

5,653,832

- 3,188,496

333,893 4,635

17,135 2,200,336

1,677,640 -

2,635,789

15,711,756

528 4,286,447

2,000 65,347

1,295,432 411,236

6,060,990

8,641,949

1,008,817

9,650,766

15,711,756

2009

N'000

5,979,073

- 3,035,934

322,376 9,268

16,496 968,666

1,674,663 -

1,279,216

13,285,692

- 1,962,965

2,000 51,826

1,723,646 388,747

4,129,184

8,560,337

596,171

9,156,508

13,285,692

2010

N'000

3,002,791

945,700 387,804

4,609 -

17,135 2,167,355

- 3,755,318 2,528,286

12,808,998

528 4,137,313

2,000 -

1,295,432 -

5,435,273

7,373,725

-

7,373,725

12,808,998

2009

N'000

3,609,822

945,700 387,804

4,609 -

16,496 933,887

- 3,750,081 1,227,750

10,876,149

- 1,772,364

2,000 -

1,723,646 -

3,498,010

7,378,139

-

7,378,139

10,876,149

}

Mr. Ballama Manu } Interim Head of Council}}

Mr. Emmanuel Ikazoboh } Council Member

These financial statements were approved by the Council Members on

21 July 2011 and signed on their behalf by:

The accounting policies on pages 23 to 27 and the notes on pages 32 to 46 form part of these financial statements.

The ExchangeThe Group


INCOME AND EXPENDITURE ACCOUNTFOR THE YEAR ENDED 31 DECEMBER 2010

Gross fees

Share of profit in associated companyOther income

Gross income

Staff costsOperating expenses

Impairment of goodwillDepreciation

Interest payable and similar charges

Operating surplus/(deficit) before taxationTaxation

Surplus/(deficit) for the year transferred toaccumulated fund

Note

20

421

6

2215

18

2010

N'000

4,011,033

445,133 337,072

4,793,238

1,354,077 1,982,606

4,632 878,496

4,219,811 21,897

4,241,708

551,530 (193,581)

357,949

2009

N'000

3,239,545

473,268 369,443

4,082,256

1,620,869 3,466,314

52,517 896,747

6,036,447 38,125

6,074,572

(1,992,316) (225,870)

(2,218,186)

2010

N'000

4,146,034

259,133

4,405,167

1,354,077 2,016,462

740,932

4,111,471 21,773

4,133,244

271,923

271,923

2009

N'000

3,442,046

- - 332,175

3,774,221

1,613,871 3,232,250

- - 743,196

5,589,317 37,928

5,627,245

(1,853,024) --

(1,853,024)



-

-

-


STATEMENT OF CASH FLOWSFOR THE YEAR ENDED 31 DECEMBER 2010

Cash flows from operating activities

Gross income

Payments to employees and suppliersInterest and similar charges

Changes in operating assets and liabilities

(Decrease)/increase in debtors and prepaymentsIncrease in stocksIncrease/(decrease) in creditors and accruals

Decrease in staff retirement benefits Increase/(decrease) in fees received in advance

Decrease in security depositDecrease/(increase) in intercompany balances

Net cash provided/(used) in operating activities

Cash flows from investing activities

Increase in construction in progressProceeds from sale of fixed assets Purchase of fixed assets

Net cash used in investing activities

Net increase/(decrease) in cash and cash equivalentsCash and cash equivalents at the

beginning of the year

Cash and cash equivalents at the end of the year

Note

23

2

11

2010

N'000

4,793,238

(3,515,693) (21,897)

1,255,648

(1,513,267) (639)

2,323,482

(428,214) 528

- -

1,637,538

(2,977) 54,245

(187,234)

(135,966)

1,501,572

1,306,510

2,808,082

2009

N'000

4,082,256

(5,729,123) (38,125)

(1,684,992)

48,584 (2,736)

(651,220)

(407,448) (70,618)

(5,670) -

(2,774,100)

- 79

(446,575)

(446,496)

(3,220,596)

4,527,106

1,306,510

2010

N'000

4,405,167

(3,239,410) (21,773)

1,143,984

(1,515,065) (639)

2,364,949

(428,214) 528

- 6,280

1,571,823

- 11,285

(137,572)

(126,287)

1,445,536

1,255,044

2,700,580

2009

N'000

3,774,221

(4,991,422) (37,928)

(1,255,129)

59,310 (2,736)

(616,707)

(407,448) (70,618)

(5,670) (389,310)

(2,688,307)

- 79

(215,087)

(215,008)

(2,903,315)

4,158,359

1,255,044

The Exchange

Operating (deficit)/surplus before changes in

operating assets and liabilities

The Group


FINANCIAL STATEMENTS

NIGERIA

GHANA

JOHANNESBURG

EGYPT

TUNIS

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2010


2 Fixed assets

2.1 The Group

Summary

Cost/valuation

At 1 JanuaryRevaluation surplus

AdditionsDisposals

At 31 December

Depreciation

At 1 JanuaryEliminated on revaluation

Charge for the yearDisposal

At 31 December

Net book value At 31 December 2010

At 31 December 2009

Freehold

buildingsN'000

2,083,717 119,571

39,569 (3,288)

2,239,569

293,767 (293,075)

56,147 (758)

56,081

2,183,489

1,789,950

Leasehold

improvementsN'000

1,375,859 -

- -

1,375,859

57,434 -

27,729 -

85,163

1,290,696

1,318,425

Office

equipmentN'000

3,353,093 -

82,329 (42,954)

3,392,468

1,131,730 -

559,550 -

1,691,280

1,701,188

2,221,363

Furniture,

fittings and

fixtures N'000

607,802 -

31,562 (815)

638,549

252,965 -

74,610 (810)

326,765

311,784

354,836

Motor

vehiclesN'000

889,099

33,774 (50,559)

872,314

594,600

160,460 (49,421)

705,639

166,675

294,499

TotalN'000

8,309,570 - 119,571

187,234 (97,616)

8,518,759

2,330,496 - (293,075)

878,496 (50,989)

2,864,928

5,653,832

5,979,073

1. The Exchange

1.1 Legal formThese financial statements are the consolidated financial statements of The Nigerian Stock Exchange (The Exchange), which was incorporated in Nigeria as a private company limited by shares on 15 September, 1960 as Lagos Stock Exchange and its name was changed to the Nigerian Stock Exchange on 15 December 1977. It was re-incorporated as company limited by guarantee on 18 December 1990 and its subsidiaries (hereinafter collectively referred to as “the Group”).

1.2 Principal activitiesThe principal activity of the Exchange is the provision of facilities to the public for the purchase and sale of bonds, stocks and shares of any kind.


NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER, 2010 (Cont’d)

i Certain items of Leasehold improvements have been reclassified as Freehold buildings during the year to give a more meaningful classification.

.ii "Freehold building at 2/4 Customs Street, Lagos (with an initial cost of N903,829,000) was revalued on the basis

of an open market valuation for existing use in March, 2005 at N1,500,000,000 by Messrs Trumph Real Estate (Estate Surveyors and Valuers).The revaluation surplus of N596,171,000 at the revaluation date has been included in the revaluation reserve. On 5 March, 2010, the Freehold building at 2/4 Customs Street, Lagos was revalued at N2,200,000,000 by Messrs Ora Egbunike & Associates (Estate Surveyors, Valuers and Facilities Managers). The surplus on revaluation was transferred to revaluation reserve. "

2.2 The Exchange

Summary

Cost

At 1 January

AdditionsDisposals

At 31 December

Depreciation

At 1 January

Charge for the yearDisposal

At 31 December

Net book value At 31 December 2010

At 31 December 2009

Freeholdbuildings

N'000

3,288

- (3,288)

-

692

66(758)

-

-

2,596

Leaseholdimprovements

N'000

1,375,859

- -

1,375,859

57,434

27,489-

84,923

1,290,936

1,318,425

Officeequipment

N'000

2,607,389

82,329 -

2,689,718

928,452

490,753-

1,419,205

1,270,513

1,678,937

2010N'000

fittings and

Furniture,

fixtures

N'000

536,357

21,470 (815)

557,012

220,766

62,389(810)

282,345

274,667

315,590

2009N'000

3. Investment in subsidiaries

NSE Consult Limited - - Coral Properties Plc - -

Naira Properties Limited - -

- - Provision for diminution in value (note 3.1) - -

- -

Motorvehicles

N'000

886,399

33,773 (50,558)

869,614

592,125

160,235(49,421)

702,939

166,675

294,274

2010N'000

1,000 72,000

945,700

1,018,700 (73,000)

945,700

Total

N'000

5,409,292

137,572 (54,661)

5,492,203

1,799,469

740,932 (50,989)

2,489,412

3,002,791

3,609,822

2009N'000

1,000 72,000

945,700

1,018,700 (73,000)

945,700


i Certain items of Leasehold improvements have been reclassified as Freehold buildings during the year to give a more meaningful classification.

NOTES TO THE FINANCIAL STATEMENTS


FOR THE YEAR ENDED 31 DECEMBER, 2010 (Cont’d)

3.1 Provision for impairment

At 1 JanuaryArising during the year

At 31 December

2010N'000

- -

-

2009N'000

- -

-

2010N'000

73,000

73,000

2009N'000

72,000 - 1,000

73,000

3.2 Information on subsidiaries

The Exchange has three subsidiaries:%

NSE Consult Limited 100Coral Properties Plc 100Naira Properties Limited 100

The Exchange

4. Investment in associated company

Central Securities Clearing System Limited (note 4.1)

4.1

Cost of investment on acquisitionShare of profit of previous years

Share of current year profit @ 27%

Share of current year tax @ 27%Dividend received

2010N'000

3,188,496

387,804

2,648,130

3,035,934

445,133

(157,571)

(135,000)

3,188,496

3,035,934

2,520,276

2,908,080

3,035,934

2009N'000

387,804

473,268

(142,914)

(202,500)

2009N'000

387,804

387,804

-

387,804

-

-

-

387,804

2010N'000

387,804

387,804-

387,804

-

--

387,804

Central Securities and Clearing

System Limited


The Group

All the subsidiary companies are incorporated in Nigeria. The results of all subsidiaries have been consolidated with those of The Exchange except for Coral Properties Plc.

(a) NSE Consult Limited The Consult was incorporated on 19 May 2004 and commenced business on 15 April 2005. Its principal objective is to carry on business as consultants, financial advisers and analysts, and to carry on business as the investment and private sector arm/subsidiary of The Nigerian Stock Exchange.

(B) Coral Properties Plc Coral Properties Plc was incorporated in Nigeria as a private limited liability company on 20 May 1993 and became a public Company on 29 August 1995.

(c ) Naira Properties Limited Naira Properties Limited was incorporated on 29th June 1974 as a limited liability company. The company became a wholly owned subsidiary of the Exchange in 2005 when the Daily Times' divested its 60% equity interest in the company. The company’s main activities are property letting and investment.



5. Investment in quoted equities

12.5% FRN Development Stock 2011[Market value -N401,000 (2009 - N401,000)]

Equities[Market value -N14,410,234 (2009 - N13,737,375)]

Managed funds (note 5.1)

Provision for diminution in value

6. Goodwill

At 1 January Impairment

At 31 December

2010N'000

401

4,208

600,000

604,609

(270,716)

333,893

2010

N'000

9,268(4,632)

4,635

2009N'000

401

4,208

600,000

604,609

(282,233)

322,376

2009

N'000

61,785 (52,517)

9,268

2010 N'000

401

4,208

4,609

4,609

2010

N'000

- - -

-

2009 N'000

401

4,208

4,609

--

4,609

2009

N'000

-

-

The Group

The Group

The Exchange

The Exchange

4.2 Central Securities and Clearing System Limited (CSCS) was incorporated in Nigeria as a private limited liability

company on 29 July 1992 and commenced operations on 14 April 1997.The principal activities of the Company are to function as central depositors for all share certificates of quoted securities including government stocks; clearing and settlement of stocks traded on the floors of The Nigerian Stock Exchange; to provide custodian services for share certificates of local and foreign investors and act as sub- registry for all quoted securities in conjunction with registrars of quoted companies. The Nigerian Stock Exchange owns only 27% of the shares of the Company.

This represents the excess of the purchase consideration over the fair value of the aggregate assets of the subsidiary (Naira Properties Limited) at the time of acquisition in 2005. Goodwill arising on the acquisition has been subjected to tests for impairment as at 31 December, 2010 in accordance with the provision of the statement of Accounting Standard (SAS) 26 and was found by the Council to be impaired.

5.1 Managed funds represents investments held with various portfolio managers. The investments are in

quoted equities on discretionary basis. Provision is made for any impairment or diminution in the value of investment.

7. Inventories

StationerySouvenirs

Library books

7,072 4,888

5,175

17,135

2,357 114

14,025

16,496

7,072 4,888

5,175

17,135

2,357 114

14,025

16,496




8. Debtors and prepayments

Trade debtors - Listing fees- Transaction levy

- Eligibility fees - Rent receivable

Interest receivablePrepayments and other debit balancesStaff debtors

Gratuity scheme funds (note 16.3)

Sundry debtors

Provision for doubtful accounts (note 8.3)

2010

N'000

232,114 190,236

- 47,940

15,256 18,485

120,517

274,979

1,482,565 307,143

10,106

2,699,341

(499,005)

2,200,336

1,462,411

2009

N'000

247,215 243,629

191,764

19,728 138,950 140,309

200,000

276,337

4,477

(493,745)

968,666

2010

N'000

232,114 190,236

- - -

15,256 18,485

120,517

274,979

- 1,482,565 307,143

-

2,641,295

(473,940)

2,167,355

2009

N'000

247,215 243,629

136,397 -

19,728 138,951 140,310

200,000

- 276,337

-

1,402,567

(468,680)

933,887


Deferred recovery of bonuses (note 8.2 and note 13.2)

Due from NSE/CSCS Multipurpose Cooperative Society (note 8.1)

8.1payments charged to but disputed by NSE/CSCS Multipurpose Co-operative Society in connection with the purchase of shares. Effort is being made by management to recover this amount and this transaction is currently the subject of a litigation.

8.2 Between 2006 - 2008, N1.39billion was distributed to certain Council members as share of surplus. Because

this payment is against section 26(3) of Companies and Allied Matters Act 1990, the Securities and Exchange Commission directed The Exchange to recover the money from the Council Members involved. Refunds amounting to N607million (note 13.1) have been received and are maintained in an escrow account with FCMB. Part of the outstanding balance of N783.8million (note 13) is the subject of a litigation on account of a dispute over the basis of payment.

Included in amount due from NSE/CSCS Multipurpose Cooperative Society is N150 million which represents

8.3 Provision for doubtful accounts

At 1 January 493,745 369,218 468,680 369,218 From newly consolidated subsidiaries - 25,065 - -

493,745 394,283 468,680 369,218

Arising during the year 141,002 99,462 141,002 99,462 Provision no longer required (135,742) - (135,742) -

At 31 December 499,005 493,745 473,940 468,680

9. Construction in progress

Due from Coral Properties Plc 1,677,640 1,674,663 - -



10. Intercompany balances

Due from Coral Properties PlcDue from NSE Consult Limited

Due from Naira Properties Limited

Provision for doubtful accounts (note 10.1)



Provision no longer required

At 31 December

11. Cash and short term funds

Cash

Current accountsEscrow account with FCMB (note 8.2)

Fixed deposits

Provision for doubtful accounts



At 31 December

The Group2010

N'000

84,162 1,562,977 611,632 549,311

2,808,082 (172,294)

2,635,789

27,294 145,000

172,294

The Group2009

N'000

29,068 550,087 - 727,355

1,306,510 (27,294)

1,279,216

27,294 -

27,294

2010

N'000

1,677,640 640,569

1,707,825

4,026,034 (270,716)

3,755,318

282,233

-

(11,517)

270,716

2010

N'000

24 1,562,977 611,632 525,947

2,700,580 (172,294)

2,528,286

27,294 145,000

172,294

1,674,663

1,720,353

4,032,314

1,255,044

1,227,750

3,750,081

2009

N'000

637,297

(282,233)

535,844

149,824

(403,435)

282,233

2009

N'000

- 550,090 - 704,954

(27,294)

27,294 -

27,294

Construction work on site has stopped since 2008. The company's Directors has decided to put up thebuilding for sale.

The Exchange

12. Fees received in advance

This represents listing fees received from certain companies for the purpose of listing their shares on thefloor of The Exchange for which the process had not been concluded as at 31 December 2010.

The Exchange

This represents the total funds disbursed by The Exchange as at 31 December 2010 on behalf of one ofits subsidiaries; Coral Properties Limited towards the construction of a commercial building of 15 floors

in Port Harcourt, Rivers State of Nigeria. The construction is still in progress.




13. Creditors and accruals

Accrued expensesDue to Central Securities Clearing System Limited

Escrow account with FCMB (note 13.1 and 8.2)Subsidiary's preference share

Due to African Securities Exchanges Association

Tax on prior periods' bonuses (note 13.3)

Other liabilities

13.1 Escrow account with FCMB

Principal amountInterest

13.2 Deferred recovery of bonuses

1 Alhaji Mohamadu Koguna

2 Raymond Obieri3 Dr Mrs Ndi-Okereke Onyiuke

4 Erastus Akingbola5 Chidi Ajaegbu

6 Hauwa Audu7 Babatunde Sobamowo8 Nduka Nwonye

9 Lance Elakama10 Josephine Igbinosun

11 Alhaji Mukhtar Alkali12 Reginald Abbey Hart

2010

N'000

262,073

928,287

611,631

300

13,531

1,482,565

114,979

366,686

506,395

4,286,447

607,000

4,631

611,631

As council

members2010

N'000

67,000

110,000

146,800

80,000

50,000

55,000

64,000

64,000

56,000

11,000

50,000

30,000

783,800

2009

N'000

436,263

1,045,324

-

300

723

-

-

-

480,355

1,962,965

-

-

-

As staff

members2009

N'000

-

-

445,754

-

-

-

-

-

253,011

-

-

-

698,765

2010

N'000

231,974

928,287

611,631

-

-

1,482,565

114,979

366,686

401,191

4,137,313

607,000

4,631

611,631

Outstanding

amount2010

N'000

67,000

110,000

592,554

80,000

50,000

55,000

64,000

64,000

309,011

11,000

50,000

30,000

1,482,565

2009

N'000

351,474

1,045,324

-

-

-

-

-

-

375,566

1,772,364

-

-

-

2009

N'000

-

-

-

-

-

-

-

-

-

-

-

-

-

Deferred recovery of bonuses (note 13.2 and

note 8.2)


Deferred recovery from NSE/CSCS Multipurpose

Cooperative Society

13.3

14. Security deposits

Between 2006 and 2009, bonuses were paid to managers and staff of The Exchange. The personal income tax effect amounts to N366.6 million. Full provision has been made in the current year for this amount.

This represents security deposit collected by The Exchange on behalf of Investors Protection Fund ("the Fund") from newly registered stockbroking firms as a guarantee to investors for mitigating against loss which was remitted subsequent after the year end.



15. TaxationIncome taxShare of associate's taxDeferred taxation

At 1 JanuaryFrom newly consolidated subsidiaries

Share of associate profitDeferred taxation

16. Staff gratuity and pensions:

1. Per income and expenditure account

Provision for staff gratuity:

- excess on fund assets - release during the year

Provision for pension scheme: - Charge for the year

- Release for the year

2. Per balance sheet

Pension

At 1 January

Charge for the yearRelease for the year

Payment to fund managers

At 31 December

Gratuity

At 1 JanuaryRelease for the year

Payments to fund managers

At 31 December

2010N'000

-

-

- - - -

2010N'000

(307,143) (113,130)

117,216

(215,227)

(518,284)

215,227

117,216 (215,227)

(117,216)

-

1,508,419 (113,130)

(99,857)

1,295,432

2010N'000

13,521 157,571 22,489

193,581

51,826 -

(157,571) (22,489)

65,347

2010N'000

(307,143) (113,130)

117,216

(215,227)

(518,284)

215,227

117,216 (215,227)

(117,216)

-

1,508,419 (113,130)

(99,857)

1,295,432

1,295,432

2009N'000

1,130 142,914

81,826

225,870

- 50,696

(142,914) (81,826)

51,826

2009N'000

(276,337) -

133,339

-

(142,998)

81,888

133,339 -

-

215,227

2,049,206 -

(540,787)

1,508,419

1,723,646 1,295,432

2009N'000

-

-

- - - -

2009N'000

(276,337) -

133,339

-

(142,998)

81,888

133,339 -

-

215,227

2,049,206 -

(540,787)

1,508,419

1,723,646


The Group The Exchange

The charge for income tax in these financial statements is based on the provisions of the Companies Income Tax Act, CAP C21 LFN 2004 (Laws of the Federation of Nigeria CAP 60) as amended.The Exchange in 2004 exercised its rights under Section 23(1) of Companies Income Tax Act, CAP 21, LFN 2004 (as amended) to apply for tax exempt status. The Federal Board of Inland Revenue upheld that the income of the Exchange is not liable to tax since it is a company limited by guarantee.

At 31 December

- -




3. Transition of pension scheme“The Exchange discontinued the staff defined benefit pension scheme and transited to the contributory pension scheme effective 31 December, 2009. The respective members' retirement savings account have been credited with the transfer values of N2.1 billion that were determined in the actuarial valuation report at transition date.

The National Pension Commission with an approval letter reference number PENCOM/SURV/NSE/10/05 dated 20 May 2010 approved the discontinuance.

The actuarial valuation as at 31 December 2009 of The Nigerian Stock Exchange staff pension scheme, which was carried out by B. A Adigun and Associates, disclosed a surplus of N55.9 million. Excess provision of N215.227 million in the books of the Exchange was release during the year."

.4. Transition of gratuity scheme

"At its meeting held on 16 March 2011, the Council of The Nigerian Stock Exchange resolved to terminate the Staff Gratuity Scheme with effect from 31 March, 2011. Final entitlements due to members of staff that have spent a minimum of five years by 31 March, 2011 was determined."

The Staff Gratuity is based on defined benefit scheme and the rates proportionate to length of service applied to terminal remuneration.

Eligible staff shall only access their gratuity benefits upon disengagement from the services of The Exchange or at the discretion of Council on the recommendation of Management.



Funding status

Gratuity liabilities

Gratuity scheme fund assets

Funding deficit (note 16.5)

The gratuity fund is managed under a management agreement with Capital Assurance Limited.

5. The Council has decided to fund the shortfall over the next four years beginning from 2011.

17. Deferred tax


From newly consolidated subsidiaries

At 31 December

18. Accumulated fund

At 1 JanuaryFrom newly consolidated subsidiariesPrevious year's share of associate's profit

Surplus/(deficit) for the year

Prior year adjustment

At 31 December

2010

N'000

388,747 22,489

-

411,236

8,560,337- -

8,560,337

357,949

(276,337)

8,641,949

2009

N'000

-81,826

306,921

388,747

9,231,163(972,916)

2,520,276

10,778,523

(2,218,186)

-

8,560,337

2010N'000

1,295,432

(307,143)

988,289

2010

N'000

--

-

-

7,378,139 --

7,378,139

271,923

(276,337)

7,373,725

2009N'000

1,508,419

(276,337)

1,232,082

2009

N'000

--

-

-

9,231,163 --

9,231,163

(1,853,024)

-

7,378,139


The prior year adjustment represents the gratuity scheme fund's balance of N276.3 million as at 31 December 2009 incorporated into the financial statements.




19. Revaluation reserve

At 1 JanuaryCurrent year revaluation surplus

Accumulated depreciation eliminated on revaluation

At 31 December

20. Gross fees

Listing fees

Entrance levyTransaction levy

Other fees

21. Other income

Sundry income

Automated Trading System (ATS) training feesOther IncomePenalty

Fact book advertRemote trading access fees

SeminarsInsurance claims

22. Operating surplus/(deficit) before taxation

This is stated after charging/(crediting):

Depreciation

Council sitting allowanceOther council expenses

Director General's/Interim Administrator's emolumentsAuditors' remunerationExchange (gain)(Profit)/loss on disposal of fixed assets

2010

N'000

596,171 119,571

293,075

1,008,817

453,474

1,045,414 2,354,559

157,587

4,011,033

239,795

3,616 -

65,580

10,521 8,768

3,413 5,379

337,072

878,496

53,086 12,319

126,672 26,500

- (7,616)

2009

N'000

596,171 -

-

596,171

690,979

393,203 1,953,038

202,325

3,239,545

325,389

2,554 63

13,799

6,265 1,945

4,600 14,829

369,443

896,747

79,448 19,755

126,672 26,250

(16,965) 13,458

2010

N'000

- -

-

-

453,474

1,045,414 2,354,559

292,587

4,146,034

161,856

3,616 -

65,580

10,521 8,768

3,413 5,379

259,133

740,932

53,186 12,319

126,672 25,000

- (7,616)

2009

N'000

- -

-

-

690,979

393,203 1,953,038

404,826

3,442,046

288,183

2,554 -

13,799

6,265 1,945

4,600 14,829

332,175

896,747

79,448 19,755

126,672 25,000

(16,965) 13,458

The Group The Exchange



23. Reconciliation of operating surplus to netcash provided/(used) by operating activities

Operating surplus/(deficit)

Adjustments to reconcile net incometo net cash provided from operations:

Depreciation (Profit)/loss on sales of fixed assetsImpairment of goodwillShare of associate's profitDividend received from associateProvision for taxProvision for doubtful accounts Prior year adjustment

Changes in assets and liabilities:Increase in inventories

(Decrease)/increase in debtors and prepaymentsIncrease/(decrease) in creditors and accruals

Decrease in staff retirement benefits Increase/(decrease) in fees received in advance

Decrease in security depositDecrease/(increase) in intercompany balances

Net cash provided/(used) in operating activities

2010N'000

357,949

878,496 (7,616) 4,632

(445,133) 135,000 193,581 138,738

(276,337)

1,255,647

(639)

(1,513,267) 2,323,483

(428,214) 528

- -

1,637,538

2009N'000

(2,218,186)

896,747 13,458 52,517

(473,268) 202,500

- (158,759)

(1,684,991)

(2,736)

48,584 (651,220)

(407,448) (70,618)

(5,671) -

(2,774,100)

2010N'000

271,923

740,932 (7,616)

- - - -

138,745 (276,337)

1,143,984

(639)

(1,515,065) 2,364,949

(428,214) 528

- 6,280

1,571,823

2009N'000

(1,853,024)

743,196 13,458

- - - -

(158,759)

(1,255,129)

(2,736)

59,310 (616,707)

(407,448) (70,618)

(5,670) (389,310)

(2,688,307)





24. Employees

24.1

2010 N Number

8

20

32

21

10

35

2010Number

Managerial 10

Senior staff 88Junior staff 28

126

24.3 Staff costs N'000

Salaries and allowances 1,464,386 Pensions and gratuity (518,284)

Medical expenses 41,289

Tax on prior periods' bonuses 366,686

1,354,077

2009Number

20

36

56

31

7

50

2009Number

17

11073

200

N'000

1,669,524 (142,998)

94,343

-

1,620,869

2009Number

20

36

56

31

7

50

2009Number

17

11073

200

N'000

1,662,526 (142,998)

94,343

-

1,613,871

2010Number

8

20

32

21

10

35

2010Number

10

8828

126

N'000

1,464,386 (518,284)

41,289

366,686

1,354,077

The Exchange

The Group

Group

0 - 100,000

100,001 - 200,000

200,001 - 300,000

300,001 - 400,000

400,001 - 500,000

500,001 - Above

The number of employees in receipt of emoluments within the following ranges were:

24.2 The average number of persons employed by the Group and The Exchange in the financial year

The Exchange



25. Guarantees and other commitments 25.1 Contingent liabilities There were contingent liabilities in respect of claims and litigation against The Exchange some of which The Exchange is only a nominal party. As at 31 December 2010, contingent liabilities stood at N944,900,782 (2009:N224,100,482). These claims arose in the normal course of business and are being contested by the Exchange. The Council, having sought advice of professional legal counsel is of the opinion that no significant liability will crystallize from these cases hence no provision has been made. 25.2 Financial commitments

The Council is of the opinion that all known liabilities and commitments which are relevant in assessing the state of affairs of the Group and The Exchange, have been taken into consideration in the preparation of these financial statements.

26. Reclassification of comparative figures Where necessary, certain comparative figures have been reclassified to give a more meaningful comparison and to conform to changes in presentation in the current year.

27. Post-balance sheet event Subsequent to the financial year end, the Securities and Exchange Commission (SEC) approved the appointment of a new executive management made by the National Council of the Exchange. Oscar Onyema was appointed as The Exchange’s new Chief Executive Officer and Ade Bajomo was appointed the new Executive Director, Market Operations and Technology. Mr. Onyema resumed duties on 4 April 2011 while Mr. Bajomo resumed duties on 3 May 2011.




At 31 December 2010

Gross Income

Operating Surplus/(Deficit) before taxation

Taxation

Operating for the yearSurplus/(Deficit)

Depreciation for the year

Segment assets

Segment liabilities

Other segment information

Accumulated depreciation

RegulatoryN'000

4,715,301

682,078

(157,571)

524,507

740,932

12,808,998

5,435,273

2,489,412

ConsultancyN'000

2,611

(1,537)

-

(1,537)

553

380,048

134,086

6,386

Property

managementN'000

75,326

(129,012)

(36,010)

(165,022)

137,011

2,522,711

491,631

369,130

TotalN'000

4,793,238

551,530

(193,581)

357,950

878,496

15,711,756

6,060,990

2,864,928

28. Segment reporting

28.1 Business segment

The group is divided into three main business segments on a nationwide basis:

- Regulatory services - Regulating the activities of all stockbroking firms in Nigeria while providing them the facilities for the purchase and sale of bonds, stocks and shares of any kind.

- Consultancy services - Providing consultancy, financial advisory & analysis and investment services to both the private and public sectors of Nigeria.

- Property management - Providing property letting, property management and to the members of the public.


VALUE ADDED STATEMENTFOR THE YEAR ENDED 31 DECEMBER, 2010

Gross income

Bought -in materials and Services [Local]

Value added

Applied as follows:

In payment of employees:

Staff costs

In payment to government:Taxation

Replacement of assets and expansion of business:

Deferred taxationDepreciation on fixed assets

Surplus/(deficit) for the year

2010N'000

4,793,238

2,009,135

2,784,103

1,354,077

171,092

22,489 878,496

357,949

2,784,103

%

100

49

6

1 32

12

100

2009N'000

4,082,256

(3,556,956)

525,300

1,620,869

144,044

81,826 896,747

(2,218,186)

525,300

%

100

309

27

16 171

(422)

100

2010N'000

4,405,167

(2,038,235)

2,366,932

1,354,077

-

- 740,932

271,923

2,366,932

%

100

57

-

- 31

12

100

2009N'000

3,774,221

(3,673,613)

504,043

1,613,871

-

- 743,196

(1,853,024)

504,043

%

100

320

-

-147

(367)

100


Value added is the wealth created by the efforts of the Group and The Exchange and its employees and its allocation between employees, shareholders, government and re-investment for the future creation of further wealth.


2010 2009 2010 2009 2008 2007 2006

N'000 N'000 N'000 N'000 N'000 N'000 N'000Assets

Fixed assets 5,653,832 5,979,073 3,002,791 3,609,822 4,151,468 989,840 464,981

Investment in subsidiaries - - 945,700 945,700 945,700 946,700 950,067 Investment in associated company

3,188,496 3,035,934 387,804 387,804 387,804 387,804 387,804

Investment in quoted equities 333,893 322,376 4,609 4,609 - - - Goodwill 4,635 9,268 - - - - - Stocks 17,135 16,496 17,135 16,496 13,760 11,638 20,242

Debtors and prepayments 2,200,336 968,666 2,167,355 933,887 539,985 1,347,392 438,484 Construction In progress 1,677,640 1,674,663 - - - - - Inter company balances - - 3,755,318 3,750,081 3,107,160 2,255,213 47,023 Cash and short term funds 2,635,789 1,279,216 2,528,286 1,227,750 4,683,740 9,029,927 2,628,745

15,711,756 13,285,692 12,808,998 10,876,149 13,829,617 14,968,514 4,937,346

Liabilities

Overdraft - - - - 70,618 - - Fees received in advance 528 - 528 - - 1,744,626 757,877 Provision for staff gratuity

and pension 1,295,432 1,723,646 1,295,432 1,723,646 2,131,094 1,242,113 1,074,502 Taxation 65,347 51,826 - - - - - Deferred taxation 411,236 388,747 - - - - - Creditors and accruals 4,286,447 1,962,965 4,137,313 1,772,364 2,389,071 4,760,597 852,464 Security deposits 2,000 2,000 2,000 2,000 7,671 3,000 25,535

6,060,990 4,129,184 5,435,273 3,498,010 4,598,454 7,750,336 2,710,378

Reserves

Development fund - - - - - - 7,380 Revaluation reserve 1,008,817 596,171 - - - - -

Accumulated fund 8,641,949 8,560,337 7,373,725 7,378,139 9,231,163 7,218,178 2,219,588

9,650,766 9,156,508 7,373,725 7,378,139 9,231,163 7,218,178 2,226,968

15,711,756 13,285,692 12,808,998 10,876,149 13,829,617 14,968,514 4,937,346

Income and expenditureTotal income 4,793,238 4,082,256 4,405,167 3,774,221 18,709,943 16,180,231 5,744,358

551,530 (1,992,316) 271,923 (1,853,024) 2,012,985 4,991,210 1,338,942

Taxation (193,581) (225,870) - - - - - Operating surplus/(deficit) after taxation 357,949 (2,218,186) 271,923 (1,853,024) 2,012,985 4,991,210 1,338,942 Transfer to development fund - - - - - - (1,000)

Surplus/(deficit) for the year 357,949 (2,218,186) 271,923 (1,853,024) 2,012,985 4,991,210 1,337,942

The Exchange

Operating surplus/(deficit) before taxation

The Group

FIVE YEAR FINANCIAL SUMMARY

MARKET REPORT


COMPARATIVE TRADING ACTIVITIES (1968 - 2010)

PERIOD GOVERNMENT INDUSTRIAL/ TOTALSTOCKS (N) EQUITIES (N) (N)

1967/68 12,607,120 279,856 12,886,9761968/69 17,330,820 102,294 17,433,1141969/70 15,634,480 221,800 15,856,2801970/71 30,544,260 3,080,100 33,624,3601971/72 26,738,800 1,303,242 28,042,0421972/73 26,125,520 671,534 26,797,0541973/74 99,348,520 1,261,995 100,610,5151974/75 63,664,830 549,322 64,214,1521975/76 80,634,830 788,853 81,423,6831976/77 153,849,760 2,271,990 156,121,7501977/78 226,961,915 3,045,040 230,006,9551978/79 143,500,740 1,987,401 145,488,1411979/80 512,034,222 10,816,784 522,851,0061981 326,178,957 6,119,169 332,298,1261982 208,215,689 8,188,927 216,404,6161983 384,870,312 13,000,755 397,871,0671984 234,115,541 15,702,860 249,818,4011985 287,840,413 23,264,741 311,105,1541986 475,846,312 11,986,021 487,832,3331987 282,251,808 4,045,706 286,297,5141988 215,829,622 34,485,043 250,314,6651989 582,430,369 71,129,746 653,560,1151990 172,801,696 133,540,209 306,341,9051991 92,675,151 141,864,629 234,539,7801992 85,020,960 406,547,508 491,568,4681993 84,258,773 577,796,580 662,055,3531994 15,202,218 970,679,018 985,881,2361995 0.00 1,838,838,622 1,838,838,6221996 90,033,365 6,972,754,416 7,062,787,7811997 140,006,265 10,932,044,322 11,072,050,5871998 15,558,832 13,555,289,669 13,570,848,5011999 827,121 14,081,521,735 14,082,348,8562000 8,120,399 28,146,458,410 28,154,578,8092001 24,591,381 57,612,604,539 57,637,195,9202002 1,009,564,210 59,311,332,162.08 60,320,896,372.082003 281,160,000 120,421,876,169.35 120,703,036,169.352004 300,015,175 225,520,515,560.07 225,820,530,735.072005 7,321,040,000 255,616,316,433.28 262,937,356,433.282006 1,593,360,000 468,660,440,979.77 470,253,800,979.772007 0.00 2,086,294,593,691.07 2,086,294,593,691.072008 1,000,000.00 2,379,142,699,671.75 2,379,143,699,671.752009 0.00 685,717,121,523.38 685,717,121,523.382010 3,252,300.00 797,547,911,279.91 797,551,163,579.91


SUMMARY OF TRADING ACTIVITIES BY CATEGORYJANUARY - FEBRUARY - MARCH, 2010


SUMMARY OF TRADING ACTIVITIES BY CATEGORYAPRIL - MAY - JUNE, 2010

53

SUMMARY OF TRADING ACTIVITIES BY CATEGORYJULY - AUGUST - SEPTEMBER, 2010

T H E N I G E R I A N S TO C K E X C H A N G E A N N U A L R E P O R T & A C C O U N T S 2 0 1 0


SUMMARY OF TRADING ACTIVITIES BY CATEGORYOCTOBER - NOVEMBER - DECEMBER, 2010

54


THE NSE ALL-SHARE INDEX 2010

MONTH

Jan.

Feb.Mar.

AprilMay

JuneJuly

Aug.Sept.Oct.

Nov.Dec.

HIGH

22,594.00

23,846.0326,411.97

28,029.7827,859.99

26,232.57 25,905.36

25,738.79 24,247.33 25,278.23

25,891.13 24,942.38

LOW

20,838.90

22,863.5122,923.91

25,607.3024,227.26

25,154.26 24,609.30

24,111.51 22,407.50 23,623.81

24,462.73 24,287.50

AVERAGE

22,002.59

23,110.4924,252.57

27,058.3926,857.69

25,625.49 25,128.99

25,025.06 23,253.52 24,606.13

24,954.29 24,611.75

-

5,000.00

10,000.00

15,000.00

20,000.00

25,000.00

30,000.00

NSE ALL-SHARE INDEX (High, Low, Average 2010)

HIGH

LOW

AVERAGE

Jan

.

Feb

.

Ma

r.

Ap

ril

Ma

y

Jun

e

July

Au

g.

Sep

t.

Oct

.

No

v.

De

c.

20,000.0021,000.0022,000.0023,000.0024,000.0025,000.0026,000.0027,000.00

The All-Share Index (2010)

Months

Jan. 22,594.90Feb. 23,846.03 Mar. 25,966.25 April 26,453.20 May 26,183.21June 25,384.14

July 25,844.18Aug. 24,268.24

Sept. 23,050.59Oct. 25,042.16

Nov. 24,764.65 Dec. 24,770.52

Ind

ex

20

10


SUMMARY OF TRADING ACTIVITIES JANUARY TO DECEMBER, 2010

MONTH

Jan.

Feb. Mar.

April May

June July

Aug. Sept.

Oct. Nov. Dec.

DEALS

133,112

296,194 185,643

206,182 180,489

172,861 134,220

142,594 117,366

117,203 121,531 111,114

VOLUME

7,858,151,444

8,281,823,360 10,734,236,889

12,597,012,058 8,249,621,689

7,105,511,532 7,638,058,081

5,265,591,620 4,836,603,913

6,707,643,759 7,434,138,490 6,627,104,060

VALUE (N)

46,739,295,982.76

54,061,118,226.58 90,996,877,419.22

108,306,779,073.44 76,140,208,232.48

60,729,155,910.26 58,795,754,118.05

46,910,315,770.14 47,255,670,246.30

90,601,144,379.45 60,339,217,597.83 56,676,046,280.24

-

20,000,000,000

40,000,000,000

60,000,000,000

80,000,000,000

100,000,000,000

120,000,000,000

Jan. Mar. May July Sept. Nov.

SUMMARY OF TRADING ACTIVITIES JAN -DEC, 2010

DEALS VOLUME

Dec.

SUMMARY OF TRADING ACTIVITIES JAN -DEC, 2010


SUMMARY OF TRADING ACTIVITIES JANUARY TO DECEMBER, 2010

-

2,000,000,000

4,000,000,000

6,000,000,000

8,000,000,000

10,000,000,000

12,000,000,000

14,000,000,000

Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec.

VOLUME OF TRANSACTIONS (JANUARY - DECEMBER 2010)

VOLUME

-

20,000,000,000.00

40,000,000,000.00

60,000,000,000.00

80,000,000,000.00

100,000,000,000.00

120,000,000,000.00

Jan. Feb. Mar. April May June July Aug. Sept. Oct. Nov. Dec.

SUMMARY OF DEALS FROM JANUARY - DECEMBER 2010

DEALS

-

50,000

100,000

150,000

200,000

250,000

300,000 296,194

DEALS

VALUE (N) OF TRANSACTIONS (JANUARY - DECEMBER 2010)

VALUE (N)

Jan

.

Feb

.

Ma

r.

Ap

ril

Ma

y

Jun

e

July

Au

g.

Sep

t.

Oct

.

No

v.

De

c.

-

20,000,000,000.00

40,000,000,000.00

60,000,000,000.00

80,000,000,000.00

100,000,000,000.00

120,000,000,000.00

Jan Feb. Mar Apr May Jun Jul Aug Sept. Oct. Nov. Dec.

MONTHLY TRADING ACTIVITIES VALUES 2010

Govt. Stocks

Ind. Loans, Corporate

Bonds & Sun -Nat. Bonds

Equities


MONTHLY TRADING ACTIVITIES VALUES 2010

EQUITIES TOTAL

N N

46,739,295,982.76 46,739,295,982.76

54,057,865,926.58 54,061,118,226.58 90,996,877,419.22 90,996,877,419.22

108,306,779,073.44 108,306,779,073.44 76,140,208,232.48 76,140,208,232.48

60,729,155,910.26 60,729,155,910.26 58,787,122,618.05 58,795,754,118.05 46,908,060,770.14 46,910,315,770.14

47,255,670,246.30 47,255,670,246.30 91,045,179,299.33 91,045,179,299.33

60,339,217,597.83 60,339,217,597.83

MONTHS

Jan.

Feb.Mar.

AprilMay

JuneJulyAug.

Sept.Oct.

Nov.Dec.

GOVERNMENTSTOCKS

N

-

- -

- -

- -

- -

- - 56,676,046,280.24

CORP./PREF.SUB-NAT. BONDS

N

-

3,252,300.00 -

- -

- 8,631,500.00 2,255,000.00

- -

- - 56,676,046,280.24


APPROVED NEW ISSUES IN 2010 (BY INSTRUMENT)

NA

ME

OF

ISSU

ERV

OLU

ME

PR

ICE

EQU

ITIE

SC

OR

P. B

ON

DG

OV

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DM

ERG

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TOTA

L

1EC

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LC6

,66

1,8

76

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7.0

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6,6

33

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2,0

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46

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3,1

32

,00

0

2G

TBA

NK

13

,16

5,0

00

1,0

00

13

,16

5,0

00

,00

01

3,1

65

,00

0,0

00

3M

UTU

AL

BEN

EFIT

ASS

UR

AN

CE

2,3

11

,25

9,3

40

0.6

1,3

86

,75

5,6

04

1,3

86

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5,6

04

4O

AN

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PLC

30

1,6

94

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6

70

21

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8,6

41

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02

1,1

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1,3

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AC

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INC

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10

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5b

AC

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ED U

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6TO

UR

IST

CO

MPA

NY

OF

NIG

ERIA

PLC

63

4,5

85

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2

3.7

92

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5,0

78

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92

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5,0

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9

7B

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STA

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0,0

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8D

IAM

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D C

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L B

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0,0

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0,0

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5,0

00

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9M

ULT

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EX IN

TER

GR

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D F

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PLC

3,7

22

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3,6

20

3.0

01

1,1

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0,8

60

11

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7,4

80

,86

0

10

PAIN

TS A

ND

CO

ATI

NG

S M

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UFA

CTU

RIN

G P

LC7

92

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4,2

56

3.9

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2,3

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83

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2,3

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8

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SIM

CA

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AL

ALL

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FUN

D P

LC5

0,0

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3.5

05

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5,0

00

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05

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5,0

00

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0

12

STU

DIO

PR

ESS

PLC

26

2,7

81

,42

81

.40

36

7,8

93

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93

67

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3,9

99

13

UN

ITY

BA

NK

PLC

23

,92

8,1

42

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61

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23

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8,1

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62

3,9

28

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2,0

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TAN

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61

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7,9

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25

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STA

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LC1

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9,8

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90

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80

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2,9

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SKY

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CEM

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CN

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UN

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APPROVED NEW ISSUES IN 2010 (BY INSTRUMENT)

EQUITIES 162,234,589,694

CORPORATE BONDS 85,665,000,000

GOVERNMENT BONDS 88,000,000,000

MERGER 2,091,844,445,254

UNIT TRUST 9,500,000,000

EQUITIES

7%

CORPORATE BONDS

3%GOVERNMENT BONDS

4%

MERGER86%

UNIT TRUST

0%

EQUITIES

CORPORATE BONDS

GOVERNMENT BONDS

MERGER

UNIT TRUST


APPROVED NEW ISSUES IN 2010 (BY METHOD)

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PUBLIC OFFER 178,840,000,000

RIGHTS OFFER 46,601,696,341

PLACING 92,768,120,246 INTRODUCTION 17,689,773,107

MEMORANDUM 9,500,000,000

SCHEME SHARES 2,091,844,445,254

PUBLIC OFFER7%

RIGHTS OFFER2%

PLACING4%

INTRODUCTION 1%

MEMORANDUM0%

SCHEME SHARES86%

PUBLIC OFFER

RIGHTS OFFER

PLACING

INTRODUCTION

MEMORANDUM

SCHEME SHARES

APPROVED NEW ISSUES IN 2010 (BY METHOD)


GROWTH IN THE NUMBER OF LISTED SECURITIES 1990 - 2010


ACTIVE DEALING MEMBER FIRMS

1 Adonai Stockbrokers Limited (Formerly General Sec & Finance)

2 Afribank Securities Limited (Formerly AIL Sec. Ltd)

3 Afrinvest West Africa Limited (Formerly Sec Trans & Trust Co. Ltd)

4 Aims Asset Management Limited5 Alangrange Securities Limited6 Allbond Investment Limited (Owerri)7 Altrade Securities Limited8 Amyn Investment Limited9 Anchorage Securities & Finance Limited10 Anchoria Investment & Securities Limited11 Apel asset & Trust Ltd12 Apt Securities Limited13 Arian Capital Management Limited14 ARM Securities Limited

(fromerly Hamilton Hammer & Co. Ltd)15 Associated Asset Managers Ltd 16 Atlass Portfolio Ltd 17 Bestlink Investment Limited18 Bestworth Assets & Trust Limited19 BFCL Asset & Securities Limited20 BGL Securities Limited21 Bytofel Trust & Securities Limited22 Cardington Securities Limited

(former Jamkol Investment Limited)23 Camry Securities Limited (Formerly M & F Sec. Ltd)24 Capital Asset Limited25 Capital Bancorp Limited (Bancorp Sec. Ltd)26 Capital Express Securities Limited27 Capital Trust Brokers Limited28 Cardinal Stone Securities Ltd

(Formerly Plural Securities Limited)29 Cashcraft Asset Management Limited30 Cashville Investment & Securities Limited31 Centre Point Investment Limited32 Chapel Hill Denham Securities Ltd (Denham Mgt Ltd)33 Chartwell Securities Limited34 Citi Investment Capital Limited35 City Code Trust & Investment Company Limited36 Clearview Investment & Securities Limited37 Compass Investment & Securities Limited38 Consortium Investments Limited39 Cordros Capital Limited40 Core Trust & Investment Limited41 Covenant Securities & Asset Management Limited42 Cowry Asset Management Limited43 Cradle Trust Finance & Securities Limited44 Crane Securities Limited45 Crossworld Securities Limited 46 Crown Capital Limited

(Crown Wealth Assets Management Limited)47 CSL Stockbrokers Limited48 DBSL Securities Limited

49 Decanon Investment Limited50 Deep Trust & Investment Limited51 Delords Securities Limited52 Diamond Securities Limited

(Formerly Lynac and DBL )53 Dominion Trust Limited54 Dunbell Securities Limited55 Dynamic Portfolio Limited56 DSU Brokerage Services Limited57 ECL Asset Management Limited58 EDC Securities Limited (ESL)59 Emerging Capital Ltd 60 Emi Capital Resources Limited61 Enterprise Stockbrokers Limited62 Equity Capital Solutions Limited

(formerly EBN Fin.)63 Excel Securities Limited64 Express Portfolio Services Limited (Kaduna)65 Falcon Securities Limited66 FBN Securities Limited (Premium Sec Ltd)67 FCSL Asset Management Company Limited

(Formerly F&C Securities Limited)68 Fidelity Finance Company Limited69 Fidelity Securities Limited

(formerly Fidelity Union Sec. Ltd)70 Finbank Securities Limited

(formerly First Inland Securities Limited (IBN))71 Finmal Securities Limited (Abuja)72 First Integrated Capital Management Limited73 First Stockbrokers Limited74 Fittco Securities Limited75 Financial Trust Company Limited76 Foresight Securities Limited77 Forte Financial Limited (Forte Asset Mgt Ltd)78 Forthright Securities & Investments Limited79 Fortress Capital Limited

(Heritage Investment & Securities Limited)80 Fountain Securities Limited81 FSDH Securities Limited (Counters Trust Sec. Ltd)82 Funds Matrix & Assets Mgt Ltd83 Futureview securities Limited84 Gem Assets Management Ltd85 Gidauniya Investment & Securities Limited (Kano)86 Global Asset Management (Nig) Limited87 Global View Consult & Investment Limited88 GMT Assets (Rolex Securities Limited)89 Golden Securities Limited90 Gombe Securities Limited91 Gosord Securities Limited92 Greenwich Trust Limited93 GTB Securities Ltd94 GTI Capital Limited95 Harmony Investment & Securities Limited96 Heritage Capital Markets Limited

(formerly C & I Heritage Ltd)



97 Hedge Securities & Invest. Ltd98 Horizon Stockbrokers Limited99 ICMG securities Limited100 Icon Stockbrokers Limited101 Imperial Assets Managers Limited102 IMTL Securities Limited

(Investment Masters & Trust Limited)103 Independent Securities Limited104 Integrated Trust & Investment Limited105 Intercontinental Securities Limited106 International Standard Securities Limited107 Interstate Securities Limited108 Investment Centre Limited (ICL)109 Investors & Trust Company Limited110 Kakawa Asset Management Limited111 Kapital Care Trust & Securities Limited112 Kinley Securities Limited113 Kofana Securities & Investment Limited114 Kundila Finance Services Limited (Kano)115 Lakesworth Securities Limited116 Lambeth Tust & investment Company Limited117 LB Securities Limited118 Lead Securities & Investment Limited119 Lighthouse Security Limited120 LMB Stockbrokers Limited121 Long Term Global Capital Limited122 Mact Securities Limited (Maclaize Trust & Sec Ltd)123 Magnartis Finace & Investment Limited124 Mainland Trust Limited125 Maninvest Securities Limited126 Marimpex Finance & Investment Company Ltd127 Marina Securities Limited128 Marriot Securities Limited129 Maxifund Investment & Securities Plc130 Mayfield Investment Limited131 MBC Securities Limited132 Mega Equities Limited133 Mercov Securities Limited134 Meristem Securities Limited (Great Africa)135 Midas Stockbrokers Limited136 Midpoint Capital Limited137 Mission Securities Limited138 Morgan Capital Limited (Intercapital Sec Ltd)139 Mountain Investment & Securities Limited140 Mutual Alliance Investment & Securities Limited141 Networth Securities & Finance Limited142 Newdevco Finance Services Company Limited143 Nigerian International Securities Ltd144 Nigerian Stockbrokers Limited145 Northbridge Investment & Trust Limited146 Nova Finance & Securities Limited147 Oasis Capital Portfolio Limited

(Formerly OMF Sec. & Fin. Ltd)148 Omas Investment & Trust Company Limited

149 Options Securities Limited150 Partnership Investment Company Limited151 Peace Capital Markets Ltd (abuja)152 Phronesis Securities Limited153 Pilot Securities Limited154 Pinefields Securities Limited155 PIPC Securities Limited (Jos)156 Platinum Capital Limited157 Peninsula Asset Management & Investment

Company Limited158 PML Securities Limited159 Portfolio Advisers Limited160 Primewealth Capital Limited (Cooper Fleming

Stockbrokers Limited)161 Prominent Securities Ltd 162 PSI Securities Limited163 Pyramid Securities Limited164 Quantum Securities Limited165 Rainbow Securities Limited166 Readings Investment Ltd 167 Redasel Investments Limited (IIorin)168 Regency Asset Management Limited169 Rencap Securities (Nig) Limited (formerly Fathak

Investment Ltd)170 Resano Securities Limited171 Resort Securities Limited172 Reward Investmet & Service Limited173 Rowet Capital Mgt Ltd (Lombard Sec. Ltd) -

( Price Securities)174 Royal Crest Finance Limited175 Royal Trust Securities

( revalidated & commenced trading 23/3/2009)176 Securities Solutions Limited177 Security Swaps Limited178 Shalom Investment & Financial Services Limited ( Shalom Invest & Sec. Ltd)179 Shelong Invests Limited180 Sigma Securities Limited181 Signet Investment & Securities Limited182 Skye Stockbrokers Limited (PSL Limited)183 Skyview Capital Ltd184 Smadac Securities Limited185 Solid Rock Securities Limited186 PAC Securities Limited (Formerly Spring

Stockbrokers Limited) (A combination of Guardian Express Trust Limited+Niche Securities Limited +Three Stars Investment Limited

187 Spring Trust & Securities Limited188 Springboard Trust & Investment Limited189 Stanbic IBTC Stockbrokers Limited

(Stanbic Equities Nig Limited) 190 Standard Alliance Capital Asset Mgt Limited

(Standard Alliance Money Ltd)191 Standard Union Securities Limited(Kano)192 Stanwal Securities Limited



193 Strategy & Arbitrage Limited194 Summa Guaranty & Trust Company Limited195 Summit Finance Limited196 Surport Services Limited197 TFS Securities Limited & Investment Company Limited198 The Bridge Securities Limited199 The Investors Advisers Limited

(Formerly Maven Asset Ltd)200 Tiddo Securities Limited (Abuja)201 Tomil Investment Limited202 Topmost Finance & Investment Limited203 Tower asset Management Limited204 Tower Securities & Investment Company Limited205 Trade link Securities Limited206 Traders Trust & Investment Co. Limited207 Transafrica Securities Limited208 Transworld Investment Limited209 Trust Yield Securities Limited210 Trusthouse Investment Limited211 TRW Stockbrokers Limited212 UBA Stockbrokers Limited213 UIDC Securities Limited214 Unex Capital Limited215 Union Capital Markets Limited216 Valmon Securities Limited217 Valueline Securities Limited ( Port Harcourt)218 Vetiva Securities Limited (Vetiva Capital Management Limited)219 Waila Securities and Funds Limited220 Woodland Capital Markets Plc221 WSTC Securities Limited (Wall Street Trust)222 WT Securities Limited

(Formely Silver Financial Services)223 Yuderb Investment & Securities Ltd224 Zenith Securities Limited225 ESS Investment & Trust Limited226 Century Securities Limited227 Santrust Securities Limited


Dr. Oba Otudeko, OFRPast President

Alhaji Bello MaccidoNational Member

Mr. Oscar OnyemaChief Executive Officer

COUNCIL MEMBERS


Chief Reginald Abbey Hart, MON2nd Vice President


COUNCIL MEMBERS

Mr Emmanuel IkazobohNational Member

Mr. Abimbola OgunbanjoNational Member

Mrs. Dorothy Ufot, SANNational Member

Mr. Abubakar Mahmoud, SANNational Member

Mr. Hassan Usman National Member

Mr. Nsa Harrison National Member

68

Mr. Bismarck RewaneNational Member

Mrs. Yemisi AyeniNational Member

Alhaji. Lamis DikkoInstitutional Member


COUNCIL MEMBERS

Mr Ebilate Mac-YorokiDealing Member

Mr Henry OlayemiDealing Member

Mr Tofarati AgustoDealing Member

Mr. Victor OgiemwonyiCouncil Member

Mr. Akeem Oyewale MemberDealing

Mr. Chike Nwanze MemberDealing

Dr. Francis ChukwujamaDealing Member

Alhaji Kurfi GarbaDealing Member

LIST OF OFFICERS OF THE EXCHANGEAs At October 31, 2011

1. Oscar Onyema Chief Executive Officer

2. Adeolu Bajomo Executive Director & Head, Market Operations & Technology Division

3. Bola Adeeko Chief of Staff & Head, Corporate Division

1. Taba Peterside General Manager Listings Sales & Retention

2. Tinuade Awe General Manager Legal (Acting)

3. Funso Fatobi Dep. Gen. Manager Branch Network

4. Ikponmwosa Obaseki Dep. Gen. Manager Market Operations & Technology

5.

7. Sani Badamasi Asst. Gen. Manager Government Relations

8. Abdulmumini Yola Asst. Gen. Manager Administration

9. Adolphus Ekpe Asst. Gen. Manager Training

10. Josephine Igbinosun Asst. Gen. Manager Listings Regulation

11. Mohammed Momoh Asst. Gen. Manager Broker Dealer Regulation

1 .

(Acting)

(Acting)

Market Operations & Technology

(Acting)

Market Operations & Technology

Olumide Lala Dep. Gen. Manager Transformation & Change

6. Ade Ewuosho Asst. Gen. Manager Market Operations & Technology

2 Priscilla Njoku Principal Manager Administration

13. Elochukwu Uba Principal Manager Listings Regulation

14. Yvonne Emordi Principal Manager Strategy

15. Hauwa Zoaka Principal Manager Listings Regulation

16. Ebele Ogamba Principal Manager Training

17. Fidelis Imiebiakhe Principal Manager Finance

18. Chinelo Onyechi Principal Manager Human Resources

19. Cynthia Akpomudiare Principal Manager Listings Regulation

20 Ignatius Ezeja Principal Manager

21. Abdulazeez Babalola Principal Manager Market Surveillance

22. Adeyemi Osoba Principal Manager Branch Network

23. Rasaq Ozemede Principal Manager Internal Audit

24. Udeme Ntukidem Principal Manager Listings Sales & Retention

25 Jiro Ejobe Principal Manager

Officers from Principal Manager and Above

CEO and Divisional Heads


1. Odunze Okechukwu Manager Owerri

2. Gide Aminu Manager Yola

3. Mohammed Mohammed Manager Kaduna

4. Ahmed Maigari Manager Bauchi

5. Oliver Achugbue Manager Onitsha

6. Ugochi Inko-Tariah Manager Port Harcourt

7. Kayode Ogun Asst. Manager Ibadan

8. Ubong Akpainyang Asst. Manager Uyo

9. Comfort Ogunsanya Officer Abeokuta

10. Usman Kadiri Officer Kano

11. Sunday Idornigie Officer Benin

12. Adedunmola Banu Executive Assistant Ilorin

Branch Managers

CE0, DIVISONAL HEADS, AND HEADS OF DEPARTMENTS

71

Adeolu Bajomo Executive Director & Head,Market Operations & Technology Division

Tinuade Awe Legal (Acting)

Bola Adeeko Chief of Staff & Head, Corporate Division

Funso Fatobi Branch Network

Abdulmumini Yola Administration


Oscar Onyema Chief Executive Officer

Taba Peterside Listings Sales & Retention

Ikponmwosa Obaseki Market Operations

Olumide LalaTransformation & Change


Josephine Igbinosun Listings Regulation

Adolphus Ekpe Training

Yvonne EmordiStrategy

Fidelis Imiebiakhe (Acting) Finance

Abdulazeez Babalola Market Surveillance

Rasaq Ozemede (Acting) Internal Audit

CE0, DIVISONAL HEADS, AND HEADS OF DEPARTMENTS

72

Mohammed Momoh Broker Dealer Regulation

Chinelo Onyechi (Acting) Human Resources

Wole Tokede (Acting)

Corporate Communications


FLASH OF OUR FUNCTIONS

Governor of Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi; Interim President, The Nigerian Stock Exchange (NSE), Mallam Ballama

Manu; Vice President of the Federal Republic of Nigeria, Arch Namadi Sambo; Lagos State Governor, Mr. Babatunde Raji Fashola (SAN) and

Chairman, Securities and Exchange Commission (SEC), Senator Udoma Udo Udoma at the commemoration of 50 years of stock market trading in

Nigeria.

Director General, Securities and Exchange Commission (SEC), Ms Arunma Oteh; Vice President of the Federal Republic of Nigeria, Arch Namadi Sambo; Lagos State Governor, Mr. Babatunde Raji Fashola (SAN); Chairman, Securities and Exchange Commission (SEC), Senator Udoma Udo Udoma; Executive Director, Market Operations and Technology (MOT), The Nigerian Stock Exchange (NSE), Mr. Adeolu Bajomo at ringing of the closing bell for the commemoration of 50 years of stock market trading in Nigeria.

Chief Executive Officer, The Nigerian Stock Exchange (NSE), Mr. Oscar

Onyema and former Interim Administrator of The NSE, Mr. Emmanuel

Ikazoboh at the fare-well ringing of the market closing bell for Mr.

Ikazoboh. Mr. Akintola Williams, Founding Member of The Exchange is

seated in the middle.

Chief Executive Officer, The Nigerian Stock Exchange (NSE), Mr. Oscar Onyema and guests at the first CEO's Dinner organised by The Exchange.

Director General, Securities and Exchange Commission (SEC) Ms Arunma Oteh and former Interim Administrator, The Nigerian Stock Exchange (NSE) Mr. Emmanuel Ikazoboh and SEC representatives on courtesy visit to The NSE during a delegation from the SEC.



Chief Executive Officer of Roland Berger Strategy Consultants, Dr. Martin Wittig and Mr. Bismak Rewane, member of The NSE Council duringt the visit of Roland Berger Strategy Consultant to The Exchange.

Interim Head of Council The Nigerian Stock Exchange (NSE) Mallam Balama Manu; Chief Executive Officer, The NSE, Mr. Oscar Onyema; Second Vice President, The NSE, Alabo Reginald Abbey-Hart and Council member, Alhaji Lamis Dikko look at something of interest on the trading floor.

Chairperson of Multi -Trex Integrated Foods plc, Chief Bayo Akinola and Mr. Emmanuel Ikazoboh.



Some Council Members and Management Staff of The Exchange with founding member, Mr. Akintola Williams (seated middle) pose for a picture during events to mark the end of the Interim Administration

Banner reflecting the listing information for the IPF Microfinance Bank plc Listing by introduction

Mr. Ikazoboh (middle) flanked by representatives and advisers of Paints and Coatings Manufacturers Nigeria PLC during the company's listing by introduction.

DR. RAYMOND C. OBIERI2003-2006

ALHAJI ABDUL RASAQ SAN. OFR2000-2003

AARE M.K.O. ABIOLA1991-1994

CHIEF BAYO KUKU CON1987-1991

CHIEF S.O. ASABIA OFR1975-1981

CHIEF ADEOLA ODUTOLA CON1972-1975

SIR ODUMEGWU OJUKWU, OBE1963-1966

76

MR. R.I. POWELL1961 1966

MR. E.C. W. HOWARD, OBE1960 - 1961

DR. OBA OTUDEKO OFR2006-2009

MR. GOODIE IBRU, OON1997-2000

MR. PASCAL G. DOZIE, OON1994-1997

ALHAJI ALIKO M. MOHAMMED OFR1984-1987

CHIEF J.O. UDOJI OFR1981-1984

CHIEF SILAS BAMIDELE DANIYAN OFR1970-1972

SIR MOBOLAJI BANK-ANTHONY, CON, MBE1966-1970


PRESIDENTS OF THE EXCHANGE

MR BALLAMA MANUINTERIM HEAD OF COUNCIL

2010 to Date


NOTES

77


NOTES

The Nigerian Stock Exchange 50th Annual General Meeting to be held

on the 11th Floor, Stock Exchange House, 2/4 Customs Street,

Lagos on Tuesday, November 29, 2011 at 11:00 a.m.

I/We

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of

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Being a member/members of The Nigerian Stock Exchange hereby, appoint

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as my/our proxy to act and vote on my/our behalf at the Annual General

Meeting of the company to be held on Tuesday, November 29, 2011.

Dated this……………..Day of…………………. 2011

………………………………… ………………………………..………………………………..

Member's Signature Member's Name

Note:

1. A member entitled to attend and vote at the General Meeting is entitled to appoint a proxy to attend

and vote instead of himself.

2. No person shall be appointed a proxy who is not already a member of The Exchange or the

accredited representative of a member and qualified to vote save that a corporation being a member

of The Exchange may appoint as its proxy one of its Directors or other authorized representative who is

not a member of The Exchange.

3. Instruments of proxy shall be deposited at the office of The Exchange at least 48 hours before the

time of holding the meeting.

ADMISSION CARD

Annual General Meeting to be held at the 11th Floor, Stock Exchange House, 2/4 Customs Street,

Lagos, on Tuesday, November 29, 2011 at 11:00 a.m.

Name of Member (in BLOCK CAPITALS):

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ADDRESS:

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NOTE: A MEMBER OR HIS/HER PROXY MUST PRODUCE THIS ADMISSION CARD IN ORDER TO BE ADMITTED

AT THE MEETING

PROXY FORM

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